The fundamental approach is based on an in-depth and all-around study of the underlying forces of the economy, conducted to provide data that can be used to forecast future prices and market developments.
Fundamental analysis is best known as a tool for investors trying to get a very detailed assessment of what a company is worth.
If you buy a warranty from a company and want to know if the company will be able to honor it, that calls for fundamental analysis.
If you just want to know “how well” a company is doing, you might also want to use fundamental analysis.
Fundamental analysis forces you to focus on investing in businesses, not stocks. You’re not buying a lottery ticket, but a piece of ownership in a company.