What is fundamental analysis?
Should you invest in that trendy stock? Fundamental analysis can help you decide. Learn about this stock evaluation method in the MoneySense Glossary.
Why are mortgages so expensive in Canada?
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Fundamental analysis refers to investment research that evaluates stocks, bonds or other securities based on the strength or weakness of the issuer’s business. Analysts study a company’s financial statements and competitive position, the outlook for its industry and other factors to assess business and financial risks, growth prospects and the investment potential of the security at its current price.
Example: “Many fundamental analysts begin their research by reading a company’s annual report, which provides an overview of the business along with detailed financial information.”
Read more on fundamental analysis:
- Stockpicker’s turn to shine?
The shift towards passive investing is creating an opportunity for active investors. George Athanassakos makes the case for why the market needs stockpickers now more than ever. - Stock-picking tips I learned from students
Competitions can be great fun—especially when they involve young, passionate stock pickers. - What P/E can tell you about a stock, and what it can’t
Price-to-earnings ratio is a good (if imperfect) starting point for people who want to determine how expensive a company is. The ratio indicates what investors are willing to pay for every dollar of future earnings.
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