What Is Fundamental Investment Analysis?

Certain economic entities convert certain current income into capital or assets in order to obtain the expected uncertain benefits.

Analysis of investment base

Right!

for sure

(1) Investment is always a certain subject's economic behavior

(2) The purpose of investment is to obtain investment benefits

(3) Uncertainty in the benefits that investment may obtain

(4) Investment must abandon or delay a certain amount of consumption

(5) There are various forms of assets formed by investment

Investment is generally divided into: industrial investment and securities investment

Mainly divided into: direct investment and indirect investment

The significance of market analysis

Conduct market analysis and alignment

Market survey

Market forecasting

On the basis of market research, using scientific methods and means,

Use certain methods to analyze the risks and expected return levels of individual securities or portfolios to provide a basis for investment decisions.

Fundamental analysis of investment

Also known as fundamental analysis, is one of the important methods of securities investment decision analysis. Based on the intrinsic value of securities, it focuses on the analysis of various factors that affect the price of securities and their trends, in order to determine what kind of securities to invest in and when.

Investment Fundamental Analysis Technical Analysis

Use icon technology and statistical indicators to study the change model of securities prices and trading volume, and use these models to predict the changing trend of prices, as a basis for securities investment decisions.

Factors Affecting Investment Fundamental Analysis

Among the basic factors affecting stock prices, the operating status and financial status of the issuing company are directly related to the book value, theoretical value, and intrinsic value of the stock. Therefore, the above conditions should be the basic factors among the basic factors. To assess the value of stocks and make prudent investment decisions, a comprehensive analysis of the operating and financial status of the issuing company must be made.

Technical factors

Technical factors refer to internal factors and psychological factors that can affect stock price changes in short-term trends.

(I) Market factors

1. Number of transactions. The number of stock transactions is an important indicator of the market's activity and has a great impact on the trend of stock prices. When the transaction volume is consistent with the trend of the stock price, that is, when the stock price rises, the transaction volume increases, and the stock price decreases, the transaction volume decreases, indicating that the market trend is firm and demand exceeds supply. When the stock price rises and the transaction volume increases, speculators believe that the market is firm and demand is greater than supply, so they are willing to buy stocks; when the stock price declines and transaction volume decreases, it indicates that the holder is unwilling to sell stocks. Conversely, when the transaction volume is inconsistent with the stock price trend, it indicates that the market trend is weak and the supply exceeds the demand.

2. means of transaction. The basic factor that causes short-term stock price fluctuations lies in the different emphasis of market trading methods: when "bullish power" is greater than "put power", there are more buyers than sellers, resulting in a shortage of stocks and a rise in stock prices. Conversely, when the "bearish power" is greater than the "bullish power?", There are more sellers than buyers, the stock is oversupplied, and the stock price falls. Speculators sometimes buy in the market and sometimes buy, thereby earning margin profits This has also affected stock price volatility. An increase in the number of longs (including short sales) has resulted in a firm market; an increase in the number of shorts (including short sales) indicates a weak market.

3 Trading components. Among trading members, the trading methods of large households (institutional investors or well-funded individuals) obviously affect stock prices. A large number of purchases will promote the rise of the stock price and show that the market is firm; a large number of sales will force the stock price to fall and show that the market is weak.

When large households intend to control the management and operation rights of a company, they will purchase a large number of the company's shares, which will significantly increase demand and increase the stock price. In Europe and the United States, there is a special public stock purchase system for controlling another company, which publicly buys stocks at a price higher than the market price.

Except for the large outdoor, when the number of speculators operating in the short-term is in the majority, the stock price also tends to fluctuate.

4 Market width. The so-called market width refers to the difference between the number of types of prices that have risen and the number of types of prices that have fallen in the stocks traded on a certain day. Small, the market is bearish. Some people use the ups and downs to study stock market trends. The rise and fall line is a curve that averages the ratio of rising stocks to falling stocks in each period. In 1973, when the Dow Jones Industrial Average rose to an all-time high, the ups and downs had successfully forecasted a downward trend in the stock market.

5. Peak low. If there are two or three peaks with the same height (upper resistance) in the ups and downs curve, the market is weak, the stock price cannot break through the upper resistance, and the market may be bearish. Conversely, if there are two or three lows (lower resistance) of the same level in the ups and downs, the market is firm, the stock price cannot break through the lower resistance, and the market may be bullish.

In addition, the emergence of new peaks or new lows can also help us understand the strength and weakness of the stock market. New peaks and new lows refer to the rise or fall of a certain stock to a peak or low never before. Generally speaking, when the number of stocks at the new peak is higher than the new low, the market is firm and the market may rise. On the contrary, it indicates that the market is weak and the market may fall. For example, on September 11, 1986, the stock price of the New York Stock Exchange fell rapidly, and the ratio of the new peak to the new low of the day was 9:52. Most stock exchanges in the world have special reports on stock varieties that reach new peaks and new lows every day.

6. Manipulation. The artificial manipulation of stock prices is unavoidable in the stock market, especially in the initial stage of the establishment of the stock market, where there are few listed stocks and small trading volumes, and the securities management system is not sound enough, its manipulation is more obvious. The main methods for large households to manipulate stock prices are: (1) Monopoly. Large households purchase stocks with their huge funds: causing market chips to decrease, and then driving up the stock price, creating an atmosphere of increased demand, and enticing general retail investors to follow up. Then, when the stock price reaches a considerable peak, it uses hidden means to sell its holdings in order to High out low advance.

(2) Press. Large households sold a large number of stocks, increased market chips, and released unfavorable rumors, causing panic among retail investors, followed by selling, forming a decline in stock prices. Then, large households secretly bought at low prices in order to make a low entry and high out. Pressure is also called selling pressure.

(3) Transfer. Transfers are also known as hedging, that is, large households use individuals with different identities to open several accounts and use the method of offsetting transfers with each other to repeatedly make prices to raise or lower the stock price to achieve the purpose of manipulation. The operator only needs to pay a small commission (commission) and taxes. This method is relatively hidden, and even some securities self-employed or part-time businesses also engage in such activities.

(4) Run out. That is, the bulls have been raising the stock price all the time, forcing the shorts to make up, that is, the big bulls have raised the stock price, causing a rising atmosphere. The bears are afraid of rising again, making them eager to make up, and they have to let the bulls manipulate the stock price.

(5) The sound hits the west. Large investors choose some stocks with small market chips and easy to manipulate, and raise or lower the stock price, causing the illusion of retail investors to follow up blindly. However, large households took the opportunity to sell or buy other types of stocks to achieve their purpose of buying or selling stocks.

(6) Spread rumors. In order to promote the stock price to change in their own favor, big business owners deliberately create or spread some kind of rumors to promote stock price changes.

(2) Psychological factors Changes in people's psychological state will directly affect the behavior of engaging in stock trading, resulting in stock price fluctuations. One of the important reasons for the unpredictable changes in stock prices is the diversification of investor psychological changes. For example, the more the stock price rises, the stronger the investor s intention to buy, which drives the stock price to rise continuously; the more the stock price falls, the lower the investor s intention to hold the share, thereby accelerating the stock price decline. This is the specific performance of the so-called "buy up but not buy down" psychology in the stock market.

Stock price fluctuations are also related to the psychological herd effect of investors. When most investors hold a certain view on the stock price, it is difficult for individual people to insist on their own views, which often manifests as blind follow-up. This phenomenon is also manifested in the investment climate effect. The so-called investment atmosphere effect means that the atmosphere of stock trading affects the psychology and behavior of investors, and then the effect of stock prices. The investment climate effect often causes investors to make buying and selling behaviors that are contrary to their original intentions, especially at the trading site.

Many situations can cause psychological changes in investors, including some rumors or rumors that can easily lead to a wave of snap-ups or sell-offs, resulting in a stock or even most stocks in the stock market. It was raining all day in a city abroad, and many pedestrians hid under the eaves of a bank to shelter from the rain. As a result, some people mistakenly believe that there is something wrong with this bank and people are waiting to withdraw money. As soon as news broke, people holding the bank's shares rushed to sell, causing the stock's price to fall.

The influence of investors' psychological factors on stock prices often deviates from the basic factors, especially the basic factors in the basic factors, that is, the operating status and financial status of the issuing company. For example, when the U.S. stock market plummeted in 1946, the U.S. economy was in good shape, its GDP was growing, and the profitability of companies was satisfactory. But at the time when World War II had just ended, people lacked confidence in the economic prospects, so they continued to sell stocks, causing stock prices to plummet. In addition, the 1986 New York Stock Exchange wave of stock sales was also caused by certain rumors.

In view of the huge impact of psychological factors on stock price volatility, some people have proposed a stock price theory of trust. This theory is proposed because the traditional stock price theory is too focused on the company's profit, and sometimes it can not explain the phenomenon of stock market fluctuations. The theory of trust stock price especially emphasizes the role of market psychology. It believes that changes in market psychology are the core reason for explaining stock price changes, and fluctuations in stock prices are based on investors (including speculators) 'trust in future stock prices, earnings and dividends. To determine the strength.