Investing Fads

AAA

DEFINITION of 'Investing Fads'

Investing fads are current popular trends that relate to investments. Investing fads are normally characterized by a temporary excessive enthusiam for a certain investing style, which is usually unsustainable in the long term. The dot-com bubble was an example of an investing fad where investors were more inclined to purchase a stock if its business had even the slightest exposure to the internet. That fad ended with the dot-com bubble burst.

INVESTOPEDIA EXPLAINS 'Investing Fads'

Fads are sometimes confused with trends, but there is a major difference. Trends tend to persist over the longer-term and are usually based on fundamentals, whereas fads often die down after a shorter period. When investing, it is helpful to understand whether you are participating in a fad or a trend.

RELATED TERMS
  1. Internet Bubble

    A rapid rise in equity markets caused by speculation into online-based ...
  2. Investment Management

    A generic term that most commonly refers to the buying and selling ...
  3. Trend

    The general direction of a market or of the price of an asset. ...
  4. Portfolio Manager

    The person or persons responsible for investing a mutual, exchange-traded ...
  5. Registered Investment Advisor - ...

    An advisor or firm engaged in the investment advisory business ...
  6. Trend Analysis

    An aspect of technical analysis that tries to predict the future ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Bonds & Fixed Income

    Spotting A Market Bottom

    Recognizing a market bottom can lead to huge opportunities for an investor. We go over how you can spot the bottom so that you can reap the rewards.
  2. Fundamental Analysis

    Where's The Market Headed Now?

    Whether up, down or sideways, learn about some of the factors that drive stock market moves.
  3. Active Trading Fundamentals

    Capitalizing On Seasonal Effects

    We show you how to take advantage of periodic trends in the equity markets.
  4. Active Trading Fundamentals

    How The Power Of The Masses Drives The Market

    Market psychology is an undeniably powerful force. Find out what you can do about it.
  5. Personal Finance

    Investing In Fads

    From high-flying to fading fast, fads can mean big money for nimble investors.
  6. Trading Strategies

    Trading On The Psychology Of Round Numbers

    Price action around big round numbers, like 10, 100 and 1000 set up special trading opportunities that take advantage of shifting crowd psychology.
  7. Chart Advisor

    Commodity Traders Are Using Momentum To Profit From These Stocks

    Active traders are drawn to momentum strategies. These momentum winners of 2015 are worth a trader's second look.
  8. Trading Strategies

    How To Make The Most of Fibonacci Grids

    Build your Fibonacci skills by finding the longest price swing on your chart of interest and placing a grid over the trend. Repeat at shorter intervals.
  9. Chart Advisor

    These 4 Swing Trades Could Place You in the Money

    Take advantage of moves both higher and lower with swing trades based on trend channels.
  10. Chart Advisor

    These Uptrending Stocks Could Continue to Rally

    Here are four stocks in an uptrend which could see further runs higher over the next couple weeks.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center