Fundamental analysis

Fundamental analysis is another form of financial analysis. Its goal is to determine the fair or reasonable price of securities ("inner value"). In contrast to the chart analysis, it is not based on considerations of price movements, but on business data and the economic environment of a company, the so-called fundamental data. In addition to the technical analysis, which analyzes the prices of an basic asset and tries to draw conclusions about future movements, fundamental analysis is the other main method of analysis in the financial markets.

Fundamental analysis focuses on the review of immediate company figures. Profit, debt, turnover and so on are used here to get an estimate of whether a company is currently under- or overvalued.

"Sometimes risk and reward are correlated in a positive fashion. The exact opposite is true with value investing. If you buy a dollar bill for 60 cents, it's riskier than if you buy a dollar bill for 40 cents, but the expectation of reward is greater in the latter case. The greater the potential for reward in the value portfolio, the less risk there is. "- Warren Buffett