EXPERT ECONOMIC ANALYSIS.
Systematic and well-designed way of determining the maximum use of a scarce resource is what can be called economic analysis, this will have to involve comparing two or more alternative in order to achieve a certain objective obviously under some given constrains and assumptions. It is good to note that economic analysis accounts for the opportunity cost incurred in the resource and attempts to measure it in monetary terms.
An informed decision is always preferred since it does not involve regrets and in case of any challenge or a risk it is planned in advance and always averted, therefore, inexpert economic analysis it is always good to check on some issues before venturing. Almost everywhere in the current world, politics determine much on how well the economic environment is, therefore before investing it is good to ensure that the country you need to acquire that scarce resource is politically stable for a smooth leaning of economy.
It is very important to determine the industry cycle and ensure you understand when they blossom and when they grow dull and they may require regenerating or be phased off. Having the facts about company cycles helps any investor out there make an informed decision if he is making a decision of whether to venture in a certain industry at its early stages or he has to wait and venture in the last stages of maturity and decline. Company’s operating ratios and cash flow statement also gives good ideas and also helps one to make informed decisions regarding a certain investment. Auditors report, directors report and statements of financial position of an entity can be used by any investor to understand how the company has been performing over the year, having gone through all this financial statement makes the investor make an informed decision regarding investment.
Expert economic analysis will also be important when decides to venture in the stock exchange what will be required is just some knowledge on how stock market operates and even with online or a friends help you are good to go. It is very good to do a deep study on how well your broker of choice is well informed about stock market this is because there are many investors who without knowing have ended up suffering at the hands of such brokers yet they claim to know about the stocks but in the real since they don’t. Finally it is very good to note that it may be wise as an investor not to take any investment without first analyzing the ratios of the said company.