What is Research?
Research in this context is defined as the process of exploring or finding out information about stocks, bonds, futures markets, etc. The process of finding out information about stocks, bonds, futures markets etc. is sometimes called “investigative research”. The most common types of research in Finance include fundamental analysis, technical analysis, macroeconomic analysis, and behavioral finance.
One type of research method is fundamental analysis which consists of analyzing companies using objective data to make decisions about the financial value and future performance potential. Fundamental analysts look at things such as a company’s balance sheet, income statement, growth rates, margins rates for product sales and other expenses as well as the price-earnings ratio to analyze a company’s financial health.
Another type of research method is technical analysis. Technical analysts focus on patterns in the price movements of stocks, bonds, and other financial instruments. The main purpose of technical analysis is to try to identify predictable patterns that indicate when to buy an asset or sell it. Technical analysts use charting software to look for patterns in price movements. Some common things that are looked at are support levels, resistance levels, trends, momentum oscillators and market sentiment indicators such as trading volume and open interest.
Macroeconomic analysis consists of analyzing the macro-economy which includes the current state of economies around the world. A macroeconomic analyst will then use this information to help judge how it will affect businesses over time. A good example of this is the current financial crisis going on with housing at the moment. Analysts use information from these macroeconomic forecasts in order to make decisions concerning buying or selling stocks or bonds.
Behavioral finance is a new type of research that focuses on studying how past behavior can influence current decision making. The main idea behind behavioral finance is that investors often make irrational decisions when it comes to choosing financial assets which influences their investment outcomes.
Research in Business
Businesses of all sizes and types need to perform research in order to survive. It’s no secret that we live in a global, interconnected world where products and services are exchanged regularly with countries across the globe. This means businesses must keep up-to-date with research on their competitors, their clients, and themselves or they will get left behind. Many small companies don’t have the money for professional market research companies to do the research for them, so those smaller businesses must find other ways to perform their own research. Many times these businesses will use online forms, surveys, focus groups, and polls to get the information they need. While this information is pretty reliable because people aren’t able to provide false or misleading information due to the fact that they are having their opinion recorded via internet connection, it’s not necessarily accurate. Therefore it is best to be cautious when using this information as a foundation for drawing any solid conclusions.
Businesses usually start performing market research on themselves before they even think about performing any type of external research. They should know things such as what advertising has been effective for them in the past, which colors have been selling well or if any new advertising ideas have been successful for their competitors. This type of research is usually performed by the owners or managers of a business because they have a proprietary insight no one else has about their company.
It is very important to listen to those being surveyed as well as those who are not being surveyed in order to get an overall idea of what people are thinking about the business. If there are any unaddressed issues that might be causing difficulty for customers, it’s best to take care of them before the competition does.
In conclusion, there are many types of research methods both in finance and business and not all of them are based on historical data. In fact, some research methods analyze historical data but try to determine how it can be used in the future or in different ways. For instance, fundamental analysis can be used to determine future potential but technical analysis can be used to predict the future. Whatever the needs for your organization; business or financial research, Fintalent, the hiring and collaborative platform for tier-1 Strategy and M&A professionals has a pool of freelance consultants to attend to your needs.
