| Investing in stocks is no doubt a great way to plan | | | | earnings growth,little debt, low P/E and great |
| for the future if done correctly. But how does one | | | | management does not mean that the time is right. |
| know what stocks to buy? The two most common | | | | That is where I apply technical analysis. By studying |
| approaches to researching stocks and deciding where | | | | the charts and other indicators I can get an idea of |
| to invest are fundamental analysis and technical | | | | whether the stock is is trading within a current range, |
| analysis. | | | | trending higher or trending lower. This can help me |
| When I was initially exposed to technical analysis, I | | | | find entry points as well as time my investment so |
| didn't believe in it. I thought it was silly to think that | | | | that I don't have to ride a stock down before it |
| just by looking at a chart I could tell what a stock | | | | starts to go up. |
| was going to do next. I wasn't concerned with | | | | So, to recap, when looking for where to allocate new |
| where the stock had been, just where it was going. | | | | money or to rotate into a different sector, I spend |
| What I have found is that coupling the two types of | | | | my time looking at the underlying fundamentals of a |
| analysis is what makes me comfortable. I don't | | | | company such as earnings, growth, P/E, balance |
| believe in putting good money behind bad companies, | | | | sheet, management to name a few. Once I have |
| so I use fundamental analysis when looking for new | | | | identified companies with good valuations, I will use |
| opportunities. But just because a company has great | | | | technical analysis to find entry points and exit points. |