Security Analysis

Security analysis is the process of evaluating the intrinsic value of financial securities such as stocks, bonds, and other assets. This evaluation is typically done by studying financial statements, industry trends, and macroeconomic factors. There are two primary methods of security analysis: fundamental analysis and technical analysis. Fundamental analysis involves assessing a company's financial health, while technical analysis focuses on price movements and chart patterns.

Example

An investor performs security analysis on a tech company’s stock by examining its earnings reports, balance sheets, and the industry’s growth prospects before deciding whether to buy or sell the stock.