What is Bottom-Up Investing?
Bottom-Up investing is a trading approach which contradict bottom-down investing approach. In bottom-up investing approach the trader chooses company stocks based on merits of companies/stocks not of the sectors/industry.
Bottom-up investors believe that a strong company can provide them profit even if the industry is not so bright. They rely up on the company’s management, business model and growth prospects. Bottom-up investors select companies by through fundamental and technical analyses. They focuses one the companies history, its stock price history, services and products offered, financial stability, dividends provided, price-to-earnings ratio, etc.
The basic features of a bottom-up investing approach are fast return from investments, high visibility, high deployment coverage and higher impact to the organization. The advantages include product/service/user awareness, not need extensive searches and analyses, etc. The disadvantages of bottom-up investing are possible failure in assessing companies and unexpected events can affect your earnings.
Bottom-up investors believe that a strong company can provide them profit even if the industry is not so bright. They rely up on the company’s management, business model and growth prospects. Bottom-up investors select companies by through fundamental and technical analyses. They focuses one the companies history, its stock price history, services and products offered, financial stability, dividends provided, price-to-earnings ratio, etc.
The basic features of a bottom-up investing approach are fast return from investments, high visibility, high deployment coverage and higher impact to the organization. The advantages include product/service/user awareness, not need extensive searches and analyses, etc. The disadvantages of bottom-up investing are possible failure in assessing companies and unexpected events can affect your earnings.
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