MASTERCLASS Investment – Fundamental and Technical Analysis – A Turnkey for Sharemarket Investment Success?

Investment – Fundamental and Technical Analysis – a turnkey for sharemarket investment success?

Investors can tend to polarize into 2 groups – fundamental and technical analysis, but we have come to  learn and to understand what benefits the 2 stock-analysis disciplines, both fundamental and technical, could bring to them with their ambitions for share-market investment success.

To analyse, is to measure, to count.  But to analyse well, you must measure what matters, and count what counts

For the most part, stock-market analysts lock themselves into one of two very different analytical camps – Fundamental Analysis is one, and the other is Technical Analysis.  It’s quite rare for a Technical Analyst (“TA”) to delve into the fundamentals of stock-picking, as this is the territory of a Fundamental Analyst (“FA”).  In practice, the technicals are chiefly the domain of the “TA”, just as fundamentals are in the realm of the “FA”.  

So, what are fundamentals, and what are technicals?  And how do they each help investors to make better share-savvy decisions? 

The first thing to know is that fundamentals assess a stock’s underlying business operation and its profit-related activities/outcomes – its financial returns.  A “FA” places the business under a “financial-ratio microscope” to measure all possible issues relating to its operational profit-growth momentum and, as a consequence, its potential share-price growth.   

The second thing to know is that technicals chart a stock’s share price upward or downward momentum.  A “TA” maps’ share prices in order to align investors with on-coming positive or negative price action – that is to ready investors to BUY when share-price patterns and volume data are indicating potential sustained rising, and to SELL when charting is indicating a potential meaningful fall in a stock’s (or the market’s) share price/s.  

In a nutshell, fundamental analysis “spots” academic reasoning for business earnings growth (business profit), and technical analysis charts and “spots” buying and/or selling (investor profit) share-price trends.

Measuring what Matters and Counting what Counts 

It is only measuring what mattersthat enables investors to “count what counts”.

An investor’s ultimate count is the net-profit outcomes resulting from the timely, technicals-triggered, “when-to-buy” and “when-to-sell” trades of fundamentals -measured & -identified investment-grade “what-to-buy” stocks. 

SuperBenefit’s investing/trading mentoring involves combining regular stock-market philosophies of:

  • Longer-term “buy & hold” investing (fundamentals)
  • And, shorter-term “buy & sell” trading (technicals)
  • That will help investors construct investment-grade “quality-stock” portfolios with bullish long-term run-with-the market growth objectives, and bearish short-term retreat-to-safety cash options as time-to-time situations would warrant.  

The below schematic shows a typical range of fundamental analysis financial ratios that would be applied by a “FA” to measure and assess the operational strength and profit-growth momentum of a business.   A positive fundamental analysis assessment relative to these below financial ratios would point up a:     

  • Financially Healthy,
  • Rationally-Valued “Growth” Company
  • With StandoutSuperior Management.

A Cascade of Fundametal Analysis Financial Ratios

Next time we will look at the Profit-Capture and Stop-Loss “Companion Power” of Technical Analysis when Applied in Conjunction with Fundamental Analysis

Want to learn the core issues of share investing? Our workshop “Navigate to Successful Share Investing” gives a 2.5 hour practical session to learn to easily understand Company Financial Statements, how tofind healthy companies, what tools and ratios to use, work on examples, and also includes how to get better investment outcomes. Other Bonuses as well. Check the next one see 2 Investment WORKSHOPS or call 0407 361 596


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in Investing - Stock Fundamentals, Masterclass Investment, SMSF Investing and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s