Are you thinking about investing some money in the stock market, but feeling overwhelmed with all the market fluctuation and strategies that are being thrown around on a daily basis? From the outside, it's easy to see why most inexperienced investors are of the opinion that the stock market is a chaotic and dangerous place for their money. But if you're looking to recoup losses from the recent economic crises, you don't have the time to wait around for high yield savings accounts and certificates of deposit to mature. Yes, there is risk in the market, but if you have a firm grasp of how to execute stock market analysis, you'll be in a good position to minimize it.

Before beginning the discussion of stock market analysis, it's important to point out that no amount of strategizing and chart analysis will make up for the use of a healthy dose of caution and common sense when it comes to investing. Too many new investors are so eager to become overnight millionaires that they forget there is a chance that they can lose money in the market by waiting just a few days too long to sell, or hesitating for a few hours when they should have been buying. The old "buy low, sell high" adage seems simple enough, but it's important to know when those points have been reached.

One of the most popular methods of stock market analysis is something called technical analysis. Although it might sound complicated, this practice is actually based on several fairly simply assumptions. First, technical analysts believe that the market is able to automatically discount prices in response to political pressure, economic instability, and changes in supply or demand. Second, they believe that price movements naturally prefer to move in trends unless something moves to interrupt them. Third, it is assumed that history is destined to repeat itself. It is this last assumption that drives technical analysts to scrutinize charts of past price movements in an effort to predict the future.

Fundamental analysis is a less popular method of stock market analysis, but it is not necessarily less useful. Preferred by those concerned with long term investments instead of day trading or short term trading, fundamental analysts spend time exploring qualitative data like company history, management integrity, public opinion, and market demand before they invest in a certain stock. These factors help them to determine the intrinsic value and therefore strength of a security.