Fundamental analysis is the older of the two strategies, and it relies on an evaluation of a company’s financials and overall business model to determine whether or not to buy its stock. Technical analysis, on the other hand, looks only at past prices and market data to divine patterns that might indicate where a stock is headed in the future.

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Both strategies are valid ways to invest, but most experts agree that technical analysis should be used in conjunction with fundamental analysis – never in lieu of it. After all, no one can predict the future with 100% certainty, so using both approaches gives you a better chance of making smart investment decisions.