hr: Money

Nowadays, it’s so easy for a person to know nothing about the stock markets, and still make good viable investments. Mutual funds and fund managers have taken almost the bogeyman out of investing.

Photo Credit: adamjinj

However, there are some brave souls who want to brave it alone. To battle the elements and storms of the stock market without a middle man to buffer them. These people spend hours doing their own research into companies, and hope that they will be able to spot those firms that will do well in the future.

When Google was still a private company, it’s employees could purchase shares at just $0.3 per share. Anyone who spent $10,000 on their shares at that time, would have made a profit of over a million dollars by now! It’s very clear why investors are willing to take this chance for the insane returns.

Inspired by people like Warren Buffet who have consistently beat the market for years together, they hope to do a better job picking and selecting their stocks than Mutual Fund managers, who charge you a fee for doing it. They try and do a ‘Fundamental Analysis’, which assumes that share prices as they exist can contain inaccuracies.

This differs from the basics of ‘Technical Analysis’ which assumes that all information is already present in the market, and ultimately, Fundamental Analysis is a waste of time. In future articles, we are going to explore more about fundamental analysis.