Glossary · Risk & Strategy
Fundamental analysis
Evaluating an asset based on financials and economic factors.
Fundamental analysis studies what a company or asset is worth based on earnings, revenue growth, margins, balance-sheet strength, industry conditions, and the broader economy. The goal is to estimate value and compare it with the market price.
It contrasts with pure technical analysis, which focuses on price and volume charts. Many investors blend both: fundamentals for what to own, charts for when to act — or vice versa.
Example
Before buying a stock, you review rising revenue, stable debt levels, and a price-to-earnings ratio that looks reasonable versus peers — that process is fundamental analysis.