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Which of the following methods of picking stocks is not consistent with fundamental analysis?

a) Value investing
b) Technical analysis
c) Growth investing
d) Dividend investing

User Jack Smit
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1 Answer

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Final answer:

Technical analysis is the method not consistent with fundamental analysis, as it relies on trading indicators rather than financial performance of companies, in contrast to value, growth, and dividend investing.

Step-by-step explanation:

The method of picking stocks that is not consistent with fundamental analysis is b) Technical analysis. Fundamental analysis involves evaluating a company's financial statements, management, competitive advantages, and market conditions to determine a stock's intrinsic value. On the other hand, technical analysis doesn't consider a company's fundamentals at all; instead, it analyzes statistical trends gathered from trading activity, such as price movement and volume. It is based on the idea that the market price reflects all known information and that patterns in the price charts can predict future market movement.

Contrarily, value investing, growth investing, and dividend investing are all strategies that rely on evaluating a company's financial health and prospects, which align with the principles of fundamental analysis. Value investors look for stocks that appear to be undervalued in the market, growth investors seek companies with strong potential for future earnings growth, and dividend investors are interested in companies that pay high dividends.

User Dirtydexter
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