Börsenlexikon: Research

In the banking environment, research refers to financial analysis. A financial analysis is a systematic preparation of information about the financial situation of companies or markets in general, often prepared by financial analysts. Financial analysis is divided into three areas: 1. fundamental analysis deals with the business data of a company and its economic environment. It attempts to calculate a "fair" or "intrinsic value" of the company and its shares and assumes that the shares will sooner or later approach this fair value due to a (not perfect, but nevertheless existing) market efficiency. 2) Chart analysis is concerned with the price development of securities, stock market indices, etc. and attempts to draw conclusions about their further development from patterns in the past price development. 3. market technical analysis deals with the behaviour of market participants. It attempts to capture their mood and behavior with appropriate indicators and to forecast their actions and their effects on stock market prices. Financial analysis rarely provides precise results. Often a combination of two or even all three forms of analysis is used to arrive at a more reliable result. There are professional, appropriately trained financial analysts who prepare extensive company studies and in the course of this usually calculate a price target and give a trading recommendation such as "buy", "accumulate" or "sell". However, financial journalists (e.g. in stock market letters) and individual investors can also carry out financial analyses. Performance measurement, which compares the predicted price trend with the actual price trend, can be used to monitor success.