What is fundamental analysis?

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What is fundamental analysis?

Fundamental analysis involves utilizing investment formulas, tools, and strategies to evaluate the intrinsic value of an asset, focusing on its fundamental aspects rather than overly technical details, making it crucial for investors seeking a deeper understanding of prospective investments.

Unlike technical analysis, which emphasizes daily price movements, candlestick chart patterns, and technical indicators like the relative strength index (RSI), fundamental analysis focuses on evaluating an asset’s overall financial health. This involves in-depth analysis of quarterly financial reports of publicly traded companies, along with consideration of sector-specific and macroeconomic trends that can impact a company’s performance, making it less reliant on short-term market fluctuations.

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