A fundamental analyst looks at a nation's entire financial picture to guide her trades, studying international macroeconomics and the forces that drive the supply of and demand for a currency. There are five of these factors:
? is that country's government in good financial shape or in the red, and what is their financial policy (pro-business, labor, etc.)
? the balance of imports versus exports, which directly affects a nation's money supply
? the growth of that country's real gross domestic product (GDP); in other words, that nation's purchasing power
? interest rate levels
? inflation level; in other words, how high are prices
These last three are all relative, which means they are compared to those same measurements for other countries to determine their strength or weakness, rather than considered as stand-alone numbers.
The fundamental analyst looks at all these factors and balances them against each other to determine whether a nation's currency will appreciate or depreciate. Of course, as the Forex market trades the currency of one nation against that of another, the fundamental analyst cannot simply study the economic picture of one country; she must study both of them, and then compare them to determine which paints a more compelling financial picture.
The technical analyst, on the other hand, looks only at the charts. He looks at the price of a currency pair (or any other commodity, such as oil prices or stocks) and sees how it has varied through time, examining the patterns it has drawn with an eye to predicting what it might do in the future.
Technical analysis is flexible. It works the same way in any market with charts (Forex, stocks, commodities, etc.). Once you learn how it's done, you can apply it in other markets and get the same results.
Fundamental analysis, on the other hand, is not flexible, because it looks at the economic data for each nation individually. The financial numbers for Great Britain, after all, have nothing to do with those for Japan or New Zealand, and the fundamental analyst cannot take her studies to another market. She must study one currency pair and learn its two nations? economies intimately if she is to be successful with this technique.
That said, fundamental analysis is good for understanding what ought to happen and for predicting the long-range trend of a currency pair. It's also true that many profitable trades are made immediately after economic announcements, when savvy traders jump into the market while everyone else is still gasping over the numbers.
On the other hand, technical analysis can give you a specific strategy for a trade, including entry and exit points and where to place your stops. It requires less time to learn than fundamental analysis, and works well for shorter trends and individual trades.
The most successful traders use a combination of these two techniques, combining chart analysis with the timing provided by economic announcements to get the best of both worlds.
If you are waiting for the right time to buy real estate, you may find yourself waiting for the right time 10 years from now. Even though the real estate market goes up and down at different times, you can make money in any type of real estate market. The fact is you really don't need a crystal ball to make money in real estate, that is, you do not need to time the real estate market perfectly. With simple strategies, you can make big profits in real estate, no matter how hot or cold the market may be.
Buy Wholesale The key is in a cold market you must always get a great deal on the property that you invest with. This way you can still sell your investment below market value and still make money. Even in cold markets, people buy and sell houses every day. Basically the same principle applies in both hot and cold markets, buy low at wholesale prices and sell high at retail prices.
As an investor, you want to get used to buying at wholesale prices. The better deal you can get on your investment, the more money you will make. Bidding low on several properties until you find someone who bites is just part of the game. Don't get discouraged if you are not able to get a house you like at a great price. You never want to get yourself personally attached or fall in love with an investment property, this is business and it's not personal.
You will always be able to find people who need to sell their property fast, and sell their house for well below market value. There are several occurrences that put people in these situations, divorce, bankruptcy, the owner is moving into a nursing home and many, many more. These events are common and can occur to anyone which will usually cause people to sell well below market value.
Rent it Out/Wait it Out Although you may find it's not such a great time to sell your property, this does not mean it's a bad time to rent. The rental market is not affected from the real estate selling market. You will be able to get just as much rent in a slow real estate market as you would a strong market. It may very well make sense to rent your house for a while until the market gets better. The rent that you collect should more than cover your expenses and you'll be paying down on your property at the same time.
So basically you should make money three ways when you rent a property out. 1. Monthly cash flow 2. Property value increases over time 3. Your paying down (paying off) your property over time
So don't worry about what type of market we are in and where it is going. There is money out there to be made. Find a great deal and go for it. The idea here is just do it, if you make a mistake you'll learn from it which will make you a better investor. You'll be far ahead of the game if you go for it and someone else is waiting trying to time the market perfectly.
Both Gerald Mason & Kevin Kiene are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.