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Trade-off between Fundamental and Technical Analysis

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  • Chowdhury, Emon Kalyan

Abstract

Fundamental analysis and technical analysis are two different approaches to evaluating stocks. Fundamental analysis is a long-term investment strategy that seeks to identify undervalued stocks by examining a company's financial statements, management, industry, and economic environment. Technical analysis is a short-term investment strategy that seeks to identify trends and make trading decisions based on those trends. Both fundamental and technical analysis have their own advantages and disadvantages. Fundamental analysis is more time-consuming and requires a deep understanding of financial statements, but it can be more reliable in the long run. Technical analysis is faster and easier to learn, but it is more prone to false signals. The best approach for an investor depends on their individual goals and risk tolerance. Investors who are looking for long-term growth may prefer fundamental analysis, while investors who are looking for short-term profits may prefer technical analysis. In some cases, it may be beneficial to use both fundamental and technical analysis together.

Suggested Citation

  • Chowdhury, Emon Kalyan, 2021. "Trade-off between Fundamental and Technical Analysis," MPRA Paper 117991, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:117991
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    File URL: https://mpra.ub.uni-muenchen.de/118206/1/2023_Portfolio_Fundamental%20vs%20Technical%20Analysis.pdf
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    References listed on IDEAS

    as
    1. Roy Brouwer & Sonia Akter & Luke Brander & Enamul Haque, 2007. "Socioeconomic Vulnerability and Adaptation to Environmental Risk: A Case Study of Climate Change and Flooding in Bangladesh," Risk Analysis, John Wiley & Sons, vol. 27(2), pages 313-326, April.
    2. Emon Kalyan Chowdhury, 2022. "Disastrous consequence of coronavirus pandemic on the earning capacity of individuals: an emerging economy perspective," SN Business & Economics, Springer, vol. 2(10), pages 1-16, October.
    3. Emon Kalyan Chowdhury & Shafaitun Nahar, 2017. "Perceptions of Accountants toward Sustainability Development Practices in Bangladesh," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 7(3), pages 112-119, September.
    4. Emon Kalyan Chowdhury, 2022. "Strategic approach to analyze the effect of Covid-19 on the stock market volatility and uncertainty: a first and second wave perspective," Journal of Capital Markets Studies, Emerald Group Publishing Limited, vol. 6(3), pages 225-241, October.
    5. Ruwan Bandara & Mario Fernando & Shahriar Akter, 2020. "Privacy concerns in E-commerce: A taxonomy and a future research agenda," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(3), pages 629-647, September.
    6. Mohammad Nayeem Abdullah & Emon Kalyan Chowdhury & Rahat Bari Tooheen, 2022. "Determinants of capital structure in banking sector: a Bangladesh perspective," SN Business & Economics, Springer, vol. 2(12), pages 1-19, December.
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    More about this item

    Keywords

    Fundamental analysis; technical analysis; intrinsic value; market trends; investments;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies

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