Fundamental analysis involves looking at a security from a financial and economic point of view.
Typically, Fundamental Analysis is a method of determining a security or product’s real market value. Usually, traders and investors tend to look at the longer-term view of the market, looking at financial statements and economic data such as market share, industry growth, competition, business cycles and regulation. Therefore, this type of analysis is not always suitable for shorter timeframes.
Fundamental analysis requires staying up to date about significant economic and financial events and determining how they can affect the price of a particular asset.
Every week, there are several scheduled economic events, including:
- Public speeches from Central bank officials.
- Economic reports pertaining to unemployment, inflation, and GDP.
- Earning reports from publicly traded companies.
- Changes in regulation that affect certain industries and businesses.
In addition to scheduled events, you should watch out for surprise events such as severe weather events that can affect the price of coffee, wheat, and other crops, and conflict that can affect the price of crude oil and gold, among other assets.
