{"id":2663,"date":"2022-02-06T17:25:18","date_gmt":"2022-02-06T17:25:18","guid":{"rendered":"https:\/\/www.joaquinlopezpascual.com\/choice-of-the-type-of-stock-market-analysis\/"},"modified":"2022-02-06T17:25:18","modified_gmt":"2022-02-06T17:25:18","slug":"choice-of-the-type-of-stock-market-analysis","status":"publish","type":"post","link":"https:\/\/www.joaquinlopezpascual.com\/en\/choice-of-the-type-of-stock-market-analysis\/","title":{"rendered":"Choice of the type of Stock Market Analysis"},"content":{"rendered":"\n

The value of a financial asset can be estimated based on the expectations regarding the performance of the issuing company and the income that it will presumably provide, that is, its future.<\/p>\n\n

These methodologies are framed within what has been called fundamental analysis<\/strong> . There is, however, another large group of methodologies that try to predict the evolution of a security based on its past. These methodologies are framed within technical analysis<\/strong> .<\/p>\n\n

These analyzes will be applicable to any type of financial asset: stocks, debentures and bonds, and even currencies or real assets.<\/p>\n\n

\"\"<\/figure>\n\n

For all these reasons, when deciding which methodology is the most appropriate for valuing an asset, a series of questions must be considered:<\/p>\n\n

Expected investment horizon<\/h2>\n\n

Normally, fundamental analysis<\/strong> provides good results when the investment horizon is long, that is, the investor commits resources for a more or less long period of time, investing in the long term.<\/p>\n\n

On the contrary, technical analysis<\/strong> is more short-term oriented, trying to get capital gains from the rapid movements that occur in the market. For this reason, technical analysis has traditionally been associated with speculation.<\/p>\n\n

Degree of market efficiency<\/h2>\n\n

Not all analyzes are valid in all markets or at all times.<\/p>\n\n

A key issue to consider is the degree of efficiency of the market, that is, its ability to quickly and reliably form prices that discount all information concerning the securities.<\/p>\n\n

This fact would cause the market price of the assets to continually revolve around their theoretical price, and the market would then be considered to function properly.<\/p>\n\n

Markets can be adjusted to three different levels of efficiency, according to a classification that has already become classic:<\/p>\n\n