Bottom-Up Investing Explained: Comparing to Top-Down Approaches
What Is Bottom-Up Investing?
Bottom-up investing focuses on analyzing individual companies rather than broader economic trends. Investors who use this method look closely at fundamentals like revenue and earnings to find strong companies. Unlike top-down investing, which focuses on the economy or sector trends, bottom-up investing prioritizes the company itself. For example, an investor may study a company like Meta to evaluate its financial health and growth prospects before making an investment decision.
Key Takeaways
- Bottom-up investing prioritizes analyzing individual stocks over macroeconomic trends and cycles.
- This approach focuses on company fundamentals, like revenue and earnings, to find investment opportunities.
- Unlike…
