Financial Market Forecast
Financial Forecasting requires a lot of expertise and experience. Making Financial Forecasting is a very difficult job and sometimes it may be inaccurate. Still, Financial Market Forecasting has become a popular practice.
Financial Markets can be categorized into the following:
Capital Markets: Stock markets and Bond markets
Foreign Exchange Markets
The Financial Markets help to raise capital (in capital markets), they facilitate transferring of risk (in derivative markets), and they help international trade (in currency markets) to grow.
The two main methods used for Financial Market Forecast are:
Fundamental Analysis: Fundamental Analysis is a method in which a security is evaluated by trying to determine its intrinsic value by examination of associated economic, financial, and other qualitative and quantitative factors. Fundamental Analysts research on everything that influences the value of the security. This may also include macroeconomic factors (overall condition of economy and industry) and particular individual factors (management and financial condition of companies). Fundamental analysis uses real data for evaluation of the value of a security like Asset Valuation, Balance Sheet Data, and Income Statement etc. Fundamental Analysis is used mostly for valuation of stocks, although it can be used for any types of securities.
Technical Analysis: The technical analysis is a method in which securities are evaluated with the help of analyzing statistical data, which is generated by market activities like past prices and volumes. Technical Analysis does not try to measure the intrinsic value of a security. It utilizes charts, graphs, and other tools to determine patterns suggestive of future activities. Technical Analysis suggests that the past performances of stocks and markets indicate the future performance. It is just the opposite approach of Fundamental Analysis.