Thursday, 23 October 2008

Fundamental analysis useful in bear market

Question: When should we use fundamental analysis?

Fundamental analysis is a good tool to engage at all times. It is particularly useful during a bear phase of the stock market.

When prices have fallen sharply to an unrealistic level, you could reap a handsome profit in future by using fundamental analysis to guide you in buying shares.

  • First, ascertain whether stock market is in a bull or bear phase.
  • If it is a Big Bear, then use Fundamental Analysis.

Ref: Making Mistakes in the Stock Market by Wong Yee

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