Analysis of Financial Markets
Ghulam, Neil (2014)
Ghulam, Neil
Laurea-ammattikorkeakoulu
2014
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2014112616818
https://urn.fi/URN:NBN:fi:amk-2014112616818
Tiivistelmä
Financial Markets are an important part of our economy. The exchange and trade that occurs on these markets are based on the price value of a variety of financial instruments such as bonds, stocks, commodities and funds. It is the ability to predict the direction and changes in prices for profitability that provide for a multibillion-dollar industry.
There are a variety of funds based on their function. The creation of funds can be traced back to the 1700’s, however in the United States the first mutual fund was formed in the 1890’s. Funds were created to provide the option to a group of investors to pool their capital together thus sharing in the risk, lessening individual risk, as well as extending their options and possibilities to target their interests.
This thesis studies the basic procedure involved in starting a hedge fund in Finland and the oversight and regulation involved. It further studies in detail the analysis required in the core operations of running the fund and assuring its sustainability and profitability. This analysis is the basis on which decisions are made pertaining to executing trades and orders in the finan- cial markets. The research for this thesis included setting up a hedge fund and then applying technical and fundamental analyses to securities. Additionally making trade decisions to earn on those trades and to see how the mentioned analyses helped in making correct and profitable decisions.
The hedge fund was setup as a normal business with a business plan. A set of policies was documented to be the guidelines for the operations of the business and trading. Technical and fundamental analysis were studied in detail and then applied to specific securities in the financial markets. Based on the study and application of the technical and fundamental anal- ysis, it was found that a combination of both technical and fundamental analysis provide for the best results in the analysis of a security. However it was also noted that technical analysis worked better for day trading rather than longer held positions, while fundamental analysis provided for a very sound basis for analysis on long term holdings. It was also found that technical indicators work best in conjunction with a variety of indicators, and that one single indicator can often be misleading. Following the policies laid out, with detailed research complemented by technical and fundamental analysis, this hedge fund can continue to grow and expand.
Keywords: Financial Markets, Technical & Fundamental Analysis, Hedge Funds.
There are a variety of funds based on their function. The creation of funds can be traced back to the 1700’s, however in the United States the first mutual fund was formed in the 1890’s. Funds were created to provide the option to a group of investors to pool their capital together thus sharing in the risk, lessening individual risk, as well as extending their options and possibilities to target their interests.
This thesis studies the basic procedure involved in starting a hedge fund in Finland and the oversight and regulation involved. It further studies in detail the analysis required in the core operations of running the fund and assuring its sustainability and profitability. This analysis is the basis on which decisions are made pertaining to executing trades and orders in the finan- cial markets. The research for this thesis included setting up a hedge fund and then applying technical and fundamental analyses to securities. Additionally making trade decisions to earn on those trades and to see how the mentioned analyses helped in making correct and profitable decisions.
The hedge fund was setup as a normal business with a business plan. A set of policies was documented to be the guidelines for the operations of the business and trading. Technical and fundamental analysis were studied in detail and then applied to specific securities in the financial markets. Based on the study and application of the technical and fundamental anal- ysis, it was found that a combination of both technical and fundamental analysis provide for the best results in the analysis of a security. However it was also noted that technical analysis worked better for day trading rather than longer held positions, while fundamental analysis provided for a very sound basis for analysis on long term holdings. It was also found that technical indicators work best in conjunction with a variety of indicators, and that one single indicator can often be misleading. Following the policies laid out, with detailed research complemented by technical and fundamental analysis, this hedge fund can continue to grow and expand.
Keywords: Financial Markets, Technical & Fundamental Analysis, Hedge Funds.