HOW CAN EARN PROFIT
THROUGH INVETMENT...?
The primary motive of buying a
share is to sell it subsequently at higher price, and earn profit. In
many cases individuals expects dividends also. For earning more
profit through investment, proper analysis is important. There are
generally two analysis, fundamental analysis and technical analysis.
An investor who would like to be rational and scientific in his
investment activity has to evaluate a lot of information about the
past performance of companies, industries, and the economy as a whole
before taking the investment decision. Such an evaluation is called
fundamental analysis.
FUNDAMENTAL ANALYSIS
fundamental analysis is
really a logical and systematic approach to estimating the future
dividends and price of a security. It is based on the basic premise
that share price is determined by a number of fundamental factors
relating to the economy, industry, and company. Hence the economy
fundamentals, industry fundamentals, and company fundamentals have to
be considered while analyzing a security for investment purpose. Each
share is assumed to have an economic worth based on its present and
future earning capacity. This is called it's intrinsic value or
fundamental value. The purpose of fundamental analysis is to evaluate
the present and future earning capacity of a share based on the
economy, industry and company factors. the investor will compare the
difference between actual value and actual value of the share and
take proper decision.
So the fundamental analysis can classifies in to
- economy analysis
- industry analysis
- company analysis
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