So before one selects the price and time at which he would buy a stock, it is crucial to ensure that the stock is fundamentally strong.
NOTE: This article is only for long-term investors.
In the comprehensive terms, fundamental analysis involves looking at any data, besides the trading patterns of the stock itself, which can be assumed to affect the price or regarded value of a stock.
As the name suggests, it means getting down to basics.
Unlike technical analysis, which focuses only on the trading and price history of a stock, fundamental analysis focuses on creating a representation of a company, identifying the intrinsic, or fundamental value of its shares and buying or selling the stock based on that knowledge.
There are two ways to select stocks that are fundamentally strong
- Learn fundamental analysis yourself and then put up efforts to find those stocks.
- Pick up stocks that the major mutual funds have in their portfolio.
The second method is the most straightforward and reliable and requires fewer efforts. It is evident that mutual funds which are putting crores of rupees on the market will always invest after completely studying and analyzing the fundamentals of the company.
So we can add those stocks to our portfolio and assured that they are fundamentally strong.
So now the question is How To find stocks that major Mutual funds are holding?
Step 1: Go to www.moneycontrol.com
Step 2: Find Mutual Funds Tab and Click on it.
Step 3: You will see the list of top mutual funds.
Step 4: Click on any mutual fund of your choice.
Step 5: Click on the holdings tab on the left.
Step 6: Great! You have found lots of fundamentally strong stocks in less than 5 minutes and that too without having any knowledge of fundamental analysis.
Conclusion: How to identify fundamentally strong stocks?
Now to get the timing right, you need to learn technical analysis – Start here