Authors: Gil Cohen
Investors use varies tools in the investment process. Some use technical or fundamental analysis, or both in that process. The difference between those investments tools have been well documented in the financial literature. However, little have been written about the difference investment behaviour between professional and non-professional investors. The aim of the following survey research is to examine differences between professional portfolio managers to nonprofessional investors in their approach towards technical and fundamental analysis. We used online survey in one of the leading business portals in addition to asking professional investors in a leading investment house in Israel. The results show no significant difference between professional and non-professional investors in terms of how frequently they use fundamental and technical investment tools. Both groups of investors use more frequently fundamental tools than technical when they make buy/sell decisions. Non- professional investors use more fundamental tools such as "analysts' recommendations" when they buy stocks and more technical tools such as "support and resistance lines" when they sell stocks. Moreover, while older investors prefer fundamental tools when they buy and sell stocks, younger investors prefer to use technical tools over fundamentals. This important result might indicate that younger investor less believe in a long time consuming fundamentals analysis than their older colleagues and they rather use a more quick method that does not demand an extensive effort and knowledge.