The literature reveals that, behavioural finance lends some support to the
methodologies of both fundamental and technical analysis. Behavioural Finance
supports the concept of investment behaviour being grounded in two dimensions,
viz., the dimensions of emotion and rationality. The evidence, presented in the
literature suggests that fundamental analysis is grounded in the rational investor,
while technical analysis is an attempt to model the behavioural side of investing
through trend following, charting and the use of indicators (e.g., momentum,
stochastic, etc.).
Typically large investment houses tend to use both technical and fundamental
analysis; technical analysis appears to be used primarily for timing, while
fundamental analysis is used to establish intrinsic or fair value of the share under
focus – thus making it easy to establish whether the share is cheap or expensive.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:unisa/oai:umkn-dsp01.int.unisa.ac.za:10500/211 |
| Date | 11 1900 |
| Creators | Essop, Yusuf Mahomed Moosa |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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