Investors are always looking for a better way to pick securities. Two types of data analysis have emerged to assist investors in making better investment decisions.

Fundamental analysis is a method used to evaluate the worth of a security by studying the financial data of the issuer. It scrutinizes the issuer's income and expenses, assets and liabilities, management, and position in its industry. In other words, it focuses on the "basics" of the business.

If you want to use fundamentals to help you make an investment decision, you will rely heavily on an offering prospectus and annual and quarterly reports, as well as any current news items relating to the issuer whose securities you are considering.

Technical analysis is a method used to evaluate the worth of a security by studying market statistics. Unlike fundamental analysis, technical analysis disregards an issuer's financial statements. Instead, when predicting how a security will perform, it relies upon market trends to ascertain investor sentiment.

If you want to use technical analysis to help you make an investment decision, you will refer to financial charts, tables, and ratios found in the financial press. You will look for market trends and averages to help you decide whether the "time is right" to make an investment.

Fundamentalists and technicians have been at odds with one another since the advent of investing. There is no clear answer as to which is right. So, which is right for you? There are many potential answers to that question.

If you are a long-term investor looking for companies with solid foundation, growth and income potential, the fundamentals may sway you. Fundamentals will also be useful to you if you are a short-term investor looking for companies that are "on the verge" of being discovered.

If you are a long-term investor who is not as concerned about one company's basics because you will diversify to minimize risk, or you are a "short-term" investor waiting for investor sentiment to change, then technical analysis will be helpful to you.

Fundamental and technical analysis differ radically in their approaches. Which method has yielded better returns over a suitable period of study has no clear answer. Nonetheless, by familiarizing yourself with the tactics and techniques of each, you will most likely be better suited to make your own investment decisions. Try using the best ideas from each camp and you should be pleased with the results.