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What Are the Different Types of Software for Fundamental Analysis?

D. Nelson
D. Nelson

Fundamental analysis is the term used to refer to any process performed by stock market investors who want to understand the health of a business, market, or economy. For example, an individual considering investment in a company might perform fundamental analysis by learning about a company's revenue, debts, and place among its competitors. Some of the most common types of software for fundamental analysis are programs that enable users to compare the performances of companies in a particular industry. Investors also use software for fundamental analysis that alerts them when they should buy or sell stocks, based on a predetermined set of criteria. In most cases, this software works in "real time," meaning that it actively updates data according to a security's actual performance.

It might be easier to understand fundamental analysis when it is compared to technical analysis. Individuals who perform technical analysis look at the history of stocks and pay attention to economic indicators that might signal certain behaviors. Fundamental analysis, on the other hand, focuses on the actual performance of stocks. Software for technical analysis usually charts the history of securities, while software for fundamental analysis shows securities' actual statuses.

Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

People who use software for fundamental analysis might have an interest in business forecasts. In these cases, individuals use programs to learn about the performance of certain markets. For example, a commodities investor might use software explains what analysts project in the commodities market. If it seems to be a good time to buy silver, he or she might alter an investment strategy accordingly to take advantage of this opportunity.

It is also common for investors to use software for fundamental analysis to analyze the statuses of individual businesses. In these cases, people use software to access the financial statements of companies. When an investor sees that a particular organization has competitive advantages over others, he or she might purchase stocks in that company. Many investors prefer software that enables them to buy and sell on the spot instead of separately contacting a broker.

Investors who have a number of different investments in one market are said to have portfolios. Some kinds of software for fundamental analysis are designed for investors who track their portfolios. Instead of focusing on the performance of one individual security, these investors tend to concentrate on the overall performance of portfolios. Software for these individuals enables them to compare their different investments and determine when to buy or sell stocks in order to manage risk and generate the highest returns.

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