Investment analysis is a broad term for many different methods of evaluating investments, industry sectors, and economic trends. It can include charting past returns to predict future performance, selecting the type of investment that best suits an investor’s needs, or evaluating individual securities such as stocks and bonds to determine their risks, yield potential, or price movements. Investment analysis involves researching and evaluating a security or an industry to predict its future performance and determine its suitability to a specific investor. Investment analysis may also involve evaluating or creating an overall financial strategy. Types of investment analysis include bottom-up, top-down, fundamental, and technical. Bottom-up investment analysis entails analysing individual stocks for their merits, such as their valuation, management competence, pricing power, and other unique characteristics. Bottom-up investment analysis does not focus on economic cycles or market cycles. Instead, it aims to find the best companies and stocks regardless of the overarching trends.

Prachi Garg

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