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Two Ways to Approach the Stock Market

By Shaun Rosenberg

If you are looking for a brief Stock Market Tutorial you are going to have to be more specific. There are two ways to approach stocks.

1. Studying Fundamental Analysis

A lot of people in the stock market focus on fundamental analysis because it looks at the company that is actually behind the stock. If the company goes up then eventually so will the stock that backs it.

Over the long term this does seem to be the case. Fundamental investors will look for stocks that are backed by companies that are making money and have a good potential to grow. Also if the company offers dividend paying stocks and pays investors a small portion of their income that only sweetens the deal.

2. Trading With Technical Analysis

A second way of looking at stocks is through technical analysis. Technical investors know that sometimes stocks do things that cannot be explained by fundamental analysis.

Instead stocks move up and down based on supply and demand. If more people buy the stock then sell it the price goes up. If more people sell it then buy it the price goes down. Luckily this creates certain patterns that occur in stocks over and over again. By learning these patterns and trading the price of the stock you can make money.

So, which one is better? Well it depends on your goals. Everyone is different and requires a different strategy.

I will say this however, the shorter the time frame is the more powerful technical analysis becomes and vice versa. So if you want to trade stocks over a few days then studying price patterns and how to play those patterns seems like the smarter move.

On the other hand if you want to buy and hold good quality companies for the long term then fundamental analysis is a better way to go and can help you a lot more.

For more on the stock market visit Shaun’s site about the Stock market basics

categories: stocks,stock market,stock market investing,wealth building,investing,investment,invest,personal finance,finance

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Article Citation
MLA Style Citation:
Rosenberg, Shaun "Two Ways to Approach the Stock Market." Two Ways to Approach the Stock Market. 8 Aug. 2010. uberarticles.com. 24 Aug 2015 <http://uberarticles.com/finance/stocks-mutual-funds/the-two-ways-to-look-at-stocks/>.

APA Style Citation:
Rosenberg, S (2010, August 8). Two Ways to Approach the Stock Market. Retrieved August 24, 2015, from http://uberarticles.com/finance/stocks-mutual-funds/the-two-ways-to-look-at-stocks/

Chicago Style Citation:
Rosenberg, Shaun "Two Ways to Approach the Stock Market" uberarticles.com. http://uberarticles.com/finance/stocks-mutual-funds/the-two-ways-to-look-at-stocks/


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