More Stock Market Myths

People, especially investors, tend to believe things that aren’t true. They hear rules of thumb or assertions from others and latch on to them instead of looking at the research and thinking things through. Here’s a quick summary of seven market myths that Cullen Roche believes you should ignore.

3. You should focus either on fundamentals or technical analysis

A great battle rages in financial circles between fundamental analysis and technical analysis. Fundamentalists believe you need to understand corporate fundamentals to predict how an asset might perform; technicians believe an asset’s past performance is the key to its future.

But this debate is like trying to determine whether it’s better to drive looking through the windshield or also utilizing the rear-view mirror. The truth is somewhere in-between, as both can be useful ways to be aware of the road. Be open-minded about financial markets. There are no holy grails and there’s value in various styles and approaches, including both fundamental- and technical analysis.