CONTENTS

 What is the definition of Fundamental analysis?

Fundamental Analysis (FA) is a method of analyzing macro factors, industry analysis, and business analysis to decide which stocks to invest in the long- term.

In which, the macro analysis will include the analysis of macro economic indicators: GDP, inflation, interest rates, monetary policy, legal regulations, taxes, politics as well as economic market analysis. And industry analysis will include the analysis of prospects, structure, cycles, opportunities, and competitive challenges in the industry. Finally, there is business analysis. When analyzing a business, investors need to pay attention to financial factors (such as revenue, profit, cash flow, etc.) and non-financial factors (such as leadership, products, management model, etc.).

 Choosing which strategies in fundamental analysis

There are two common strategies to analysis: a top-down approach and a bottom-up approach.

 Compare types of analytical methods

The common is that they both have the same goal of identifying stocks have the potential to increase price in the future. But since the approach strategies of these two methods are different, each one will have different pros and cons as follows:

With the advantages and disadvantages above, choosing which methods will depend on the objectives, risk-taking ability and taste of each investor and investors should create a balance for their investment method.

 How to do it: 

 Noted: 

Trading in the stock market is always challenging, every action you take will decide whether you will "lose money" or "make money". So, make sure that:

• Read and understand the financial statements of the business
• Check backtest trading strategies to see if they have worked effectively in the past
• Practice first with a small amount of capital, you can invest more if you have more experience.

• Fundamental analysis also has its drawbacks, you need to understand these limitations to consider risks and opportunities