Investment Analysis

AAA

DEFINITION of 'Investment Analysis'

  1. The study of how an investment is likely to perform and how suitable it is for a given investor. Investment analysis is key to any sound portfolio-management strategy. Investors not comfortable doing their own investment analysis can seek professional advice from a financial advisor.


  2. An analysis of past investment decisions. An investment analysis is a look back at previous investment decisions and the thought process of making the investment decision. Key factors should include entry price, expected time horizon, and reasons for making the decision at the time.


INVESTOPEDIA EXPLAINS 'Investment Analysis'

  1. For example, in conducting an investment analysis of a mutual fund, the investor would look at factors such as how the fund has performed compared to its benchmark. The investor could also compare performed to similar funds, its expense ratio, management stability, sector weighting, style and asset allocation. Investment goals should always be considered when analyzing an investment; one size does not always fit all, and highest returns regardless of risk are not always the goal.



  2. For any beginner investor, investment analysis is essential. Looking back at past decisions and analyzing the mistakes and successes will help fine-tune strategies. Many investors don't even document why they made an investment let alone analyze why they were wrong or right. You could make a proper decision, extraordinary events could lose you money, and if you didn't analyze it, you would shy away from making the same decision.
RELATED TERMS
  1. Random Factor Analysis

    A statistical analysis performed to determine the origin of random ...
  2. Advisor

    1. The person or company responsible for making investments on ...
  3. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
  4. Investment Advisor

    As defined by the Investment Advisors Act of 1940, any person ...
  5. Risk Management

    The process of identification, analysis and either acceptance ...
  6. Advisor Account

    A type of investment account where an investment advisor works ...
Related Articles
  1. Find The Right Financial Advisor
    Budgeting

    Find The Right Financial Advisor

  2. Shopping For A Financial Advisor
    Options & Futures

    Shopping For A Financial Advisor

  3. Tips For Controlling Investment Losses
    Active Trading Fundamentals

    Tips For Controlling Investment Losses

  4. Peak-and-Trough Analysis
    Active Trading

    Peak-and-Trough Analysis

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center