Bottom-Up Investing

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DEFINITION of 'Bottom-Up Investing'

An investment approach that de-emphasizes the significance of economic and market cycles. This approach focuses on the analysis of individual stocks. In bottom-up investing, therefore, the investor focuses his or her attention on a specific company rather than on the industry in which that company operates or on the economy as a whole.

BREAKING DOWN 'Bottom-Up Investing'

The bottom-up approach assumes that individual companies can do well even in an industry that is not performing very well. This is the opposite of "top-down investing". Making sound decisions based on a bottom-up investing strategy entails a thorough review of the company in question. This includes becoming familiar with the company's products and services, its financial stability and its research reports.

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RELATED FAQS
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    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
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