In a tech age where the BSE (Bombay Stock Exchange) offers traders the opportunity to trade at the speed of 6 microsecends, one would imagine that an investor from the early 1900s or the 1800s would be unsuccessful. Wrong! The profile of investors has remained the same over the centuries, dating back all the way to the 1600s. Finance and investing is one industry that has been unchanged with the passage of time. There are major fund houses and banks that have invested regularly in the same financial instruments for the past few decades and even centuries.
Investors and banks may have grown richer and more powerful, but the underlying tricks of the trade have still remained the same. The basic skill that investors have used well over the years is Fundamental Analysis. Fundamental Analysis basically involves an in depth study of the business, industry, ancillary industries and any other factor that could impact the business of the company we plan to invest in. The fundamentals of any business or an industry have not changed and hence, a person who has used Fundamental Analysis in the past can use it anytime in his life.
Thus, this is one key piece of information that cannot be ignored by any investor. No investment analysis can begin without actually carrying out a fundamental analysis of a company/ stock. Another advantage of Fundamental Analysis is that it prepares investors for all investing in all possible industries. An investor is able to efficiently analyse other industries after thoroughly understanding one industry. He understands the key touch points that need to be addressed with each industry and thus, can easily advance from being a novice to an expert investor.
Fundamental Analysis teaches one the art of reading an annual report. This is a key skill required for investing as this document outlines the activities of a company throughout the year. This lets one compare the competence of a company with its competitors and the industry as a whole. Mastering this skill lets people pick the diamonds in a large mine full of coal.
Majority of investors keep refreshing their knowledge by attending short term courses that keep them updated. BSE Institute Ltd (BIL) is an institute that offers multiple courses all over the country for this purpose. Visit their website and check the multiple short term courses that can help an individual become a better investor.
The legendary investor Warren Buffet is believed to have started investing while he was just 14 and he feels sad that he did not begin any sooner. Investing, Financial Analysis, Fundamental Analysis, etc. are subjects that can be learnt by anyone who understands Maths and has common sense. Many people also feel that this should be taught in school along with other main subjects. However, the beauty of investing is one who may not begin early, can still learn and earn a lot, if he plays his cards right.