Is industry analysis a must before investing?
Want to know the importance of industry analysis? Interested in investing after this analysis? Here, on this Ask Expert page go through the advice provided to decide where to invest.
Industry generally means homogenous group of firms that produce similar products to satisfy the needs of common set of buyers. Industry analysis is actually determining or evaluating the weakness and strengths of particular industries.
Industry analysis is compulsory because it helps the investors to determine the stage of growth through the industry is passing. We know that industry life cycle is segregated into four stages that is pioneering stage, expansion stages, stagnation and decay stage. In the first stage industry exhibits only low profit and in the second stage high profit and the third stable profit and last profit will be declining .
So only after analysing the stage of industry one should invest so do you agree?