Top 5 Things to Do Before Starting Fundamental Analysis

Fundamental analysis helps uncover a company’s true value, but preparation is key. Here are five steps to get started

1. Set Clear Investment Goals

Decide if you’re investing for long-term growth, dividends, or short-term gains. Your goals will shape the industries and companies you focus on.

2. Research the Industry

Understand market trends, key players, and risks. Knowing the industry gives context to a company’s position and potential.

3. Learn the Business Model

Know how the company makes money, who its customers are, and what sets it apart. A clear understanding ensures you grasp the numbers better.

4. Gather Financial Documents

Collect annual reports, quarterly updates, and SEC filings. These are the backbone of your analysis.

5. Check Macro-Economic Factors

Assess interest rates, inflation, and GDP trends. These big-picture elements can heavily impact a company’s performance.