How To Get Your Investment Confidence Back

Fundamental investing is an offshoot of value investing, so the stock chart is going to look very much like that of the value investor. But there are differences. The fundamental investor must have a significant amount of time to spend on his or her portfolio in the stock market today because it takes a lot of time to spend on his or her portfolio because it takes a lot of time to pore over balance sheets looking for the strongest of them – and if he or she is lucky – perhaps finding undervalued assets.  The fundamental investor also has to have near CPA-level of accounting smarts to be able to judge the relative merits of a particular balance sheet, as well as confidence fundamental game is one of judgment calls.

The fundamental investor needs a lot of patience, both to find companies with undervalued assets and to wait for the rewards to materialize. A fundamental stock can increase in value in value only when institutional investors “discover” the stock and begin to appreciate the relative value of the company, which is why fundamental investors also look for earnings growth potential. There has to be a reason for others to see the value in a stock.

The risk of fundamental investing is the least among all the investing styles, because, theoretically, the company’s assets are worth more than the price of the stock. Consequently, reward expectations for this style of investing are probably lower than for other styles of investing and take longer to achieve. That is why fundamental investing appeals to the most conservative investors.

As you might expect, technical skills receive the lowest score on the fundamental stock charts. No charting is required to find or enter the stock, since this is essentially a buy-and-hold investing style.