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Which is better?
It depends upon the investor and their preferred style. I have studied technical analysis but today put very little reliance on it, apart from being careful with securities that have low trading volumes. Because they are illiquid, it can be hard to sell out in future, so this has to be considered carefully.
I like fundamental analysis because it looks at intrinsic value (I am a big follower of Warren Buffett). Intrinsic value is based upon a company’s ability to generate cash flow. To make a determination of potential cash flow in future requires fundamental analysis.
I don’t really time the market at all but when I have the cash and the market is down, I tend to put more in on a portfolio basis, usually into managed funds. I set aside an allocation of the portfolio for specific opportunities I identify from time to time, based upon fundamental analysis.
What individuals should do really depends on their investment time horizon, risk appetite, tolerance for losses (which can stress you out!), current cash flow needs and a host of other things. You have really got to think these through before you do anything.
Tom The Money Man's Weblog 