Chapter 6 - Introduction to analysis

Equity analysis

In the previous module we have learnt what are stocks, IPOs, secondary markets, how prices of shares change, how actual trading takes place and about stock exchanges. Now it is time to shift our focus of learning to an important segment – that of identifying or developing a strategy for investment. As an investor, if you want to pick a share, what are you going to do? Will you just close your eyes and pick a stock? And then expect it go up in value and sell it at a higher price? But then that will not make you a good investor. A good investor is someone who believes in stock analysis. This entails keeping an eye on the market and on your portfolio to ensure that you act in time to maximize profits and cut down losses.