Microenvironment

Regardless of how the stock market is evolving, before entering into an investment, divide between whether you want to invest in the stock in long run (more than a year) or less, i.e., speculatively. Of course, we will leave what suits you up to you, but in this case, it is necessary to significantly distinguish the analysis style.

If you want to speculate on a rise/fall in price, then a long-term fundamental analysis or business microanalysis is unimportant. You need to monitor the macroeconomic situation and technical and statistical analysis with a focus to “time the entry.” In the case of investment, fundamental analysis of the company (microeconomic situation – profit and loss statement, balance sheet, CF statements, core business, competitive advantage) and other things are crucial for you.

It is also essential for you to orient yourself, at least from a fundamental point of view in important macroeconomic events (economic development, monetary policy, fiscal policy) because it affects the mood and sentiment in the market. If you also connect the technical or statistical analysis, it will be a significant plus, but you can eliminate some risks thanks to Dollar Cost Averaging strategies. However, a macro analysis can tell you whether you are in a bubble, a risk of raising rates, and whether the environment is more suitable for stocks, bonds, or cash.