Superman or Batman? The Beatles or The Rolling Stones? People can have never-ending discussions about which is the best. In the investment world, this ongoing discussion is about the superiority of technical analysis versus fundamental analysis. Find out more about both and decide for yourself.
| Fundamental analysis | Technical analysis | |
| Provides information about... | Provides a lot of information about the company. | No information, only looks at stock market data. |
| Helps you with... | Helps you decide whether to buy, keep or sell shares. | Helps you decide when to buy or sell. |
| Is carried out by... | Is carried out by experts. | You can do it yourself in My Dealing Room. |
This is the definition of fundamental analysis in our investment dictionary: “An investment method whereby the investor tries to predict the future stock market development of a share. The prediction is based on an analysis of company information”. This type of analysis is carried out by experts at ABN AMRO. It is also known as an opinion. Investment analysts carry out an in-depth investigation into a company. They explore the market, examine the business operations and analyse the local and international situations. All this information is compiled into the investment analyst’s opinion of the share.
The experts at ABN AMRO carry out fundamental analyses themselves, working closely with specialised third parties. This means that you’ll find hundreds of opinions about listed companies on Internet Banking. As well as the opinion ‘buy, keep or sell’, opinions also comprise data and an analysis of the strengths and weaknesses, the risks, the development potential and the profitability. This allows you to learn more about the share, the sector or the region you’re interested in.
Log in and go to your investment account. Tap ‘New order’ and select the share you’re interested in. You’ll find the ABN AMRO opinion at the bottom of the pages with the share details, if it’s available for the share you’ve selected.
This type of analysis doesn’t consider the company or the market. According to our investment dictionary, technical analysis is: “An investment method that tries to predict trends on the stock market on the basis of historical market graphs and indicators.” It makes use of statistical data, such as past stock market development and volume. Advocates of technical analysis use the patterns they discover in the data to predict possible stock market developments in the near future.
You can carry out your own technical analysis in My Dealing Room. Various indicators are ready and waiting to be used. And we have manuals and videos to show you how to use My Dealing Room. This is also where you’ll find the fundamental opinions for numerous shares.
When buying shares, you obviously want to know what’s going on in the company and sector you’re considering. Fundamental analysis can help you to decide which shares to buy, keep or sell. This analysis is carried out by our experts. You can carry out a technical analysis yourself in My Dealing Room. Although nobody can guarantee how share prices will rise or fall in the future, you can sometimes identify patterns in investor behaviour. You can deploy these patterns using technical analysis.
Fans often have strong preferences about Superman or Batman films, but there are also plenty of people who enjoy both. So we recommend that you explore the ins and outs of both fundamental and technical analysis so that can decide which you want to use, and how.
Investing involves risks. You could lose (some of) the money you invested. If you are going to invest, it is important that you are aware of this. Invest with money you can spare. Read more about the risks associated with investments.
All investors have emotions, even the most rational ones. Investment decisions are largely driven by these emotions. And they can be different during every phase of the stock market process. Ever wondered how you’d react? We’ll take you for a ride on the emotional roller coaster that can affect any investor.
If you want to build up your knowledge before you start investing, or just want to understand it better, learn the basics in just 8 steps.
