Approaches to Investing
By Ioannis Evangelos Haramis |
Here is a small summary of the three major approaches to investing:
1.
Fundamental Analysis
Truly superior companies exist, are sometimes
undervalued by markets, and can be identified by mostly financial research.
Earnings and dividends, stock prices and markets can be adequately forecasted.
All these can be identified by analysis of their financial statements. Buy where
forecasted price is greater than current price by a satisfactory margin.
2. Technical Analysis
Patterns in past price behavior of a
security in question and the overall market can be used to direct profitable
trading strategies. Some technical analysts also refer to a company's
fundamentals in combination with its technical indicators.
3. Efficient
Market Theory
No possible market-beating investment strategy exists. All
information relevant to a stock's long-term price performance, including
information not publicly available, is already present in the stock price for
any given period of observation.
And here are two more "truly real" ways
to approach investing:
1. The Proud Way and
2. The Humble
Way.
The proud way is for those who believe that they're smarter than
everyone else and can use their insights and abilities to make superior
investment choices.
The humble way is for those who believe that they
don't know everything. This humble approach leads them to study what has worked
over the long term and then use it.
The path to achieving investment
success is in studying long-term results and finding a strategy or group of
strategies that make sense.
This strategy is the humble way... And it does
work!
About the Author
Copyright © 2005 I.E.C.
Haramis
haramis@greekshares.com
http://www.greekshares.com
Ioannis - Evangelos C. Haramis was born in Greece in 1951 and studied in
Greece, USA and in Belgium. He has been active in the stock markets since 1972.
Since 2002 he is New Business Development Managing Director at an Investment
Bank and publisher of greekshares.com
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