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Wednesday, June 25, 2008

Analysis Using Inside Information

Some investors try to analyze the stock market by using information gained from insider sources in a company. This type of analysis and investment is called insider training and it is illegal in most places.

Comparative Analysis of Stocks

In this method of analysis, investors compare different stocks, trying to figure out which stocks are yielding more profit and which stocks are most likely to offer profit in the future. The advantage of this type of analysis is that investors will figure out which of their stocks are truly performing and which are not. This could make it easier when deciding which stocks to buy and which to sell. However, comparative analysis that does not take into consideration overall market conditions can backfire, as it can give an imprecise view of the stock market portfolio in the context of the market.

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