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. Portfolio Manager

    The person or persons responsible for investing a mutual, exchange-traded ...
  4. Trend

    The general direction of a market or of the price of an asset. ...
  5. Trend Analysis

    An aspect of technical analysis that tries to predict the future ...
  6. Registered Investment Advisor - ...

    An advisor or firm engaged in the investment advisory business ...
Related Articles
  1. Where's The Market Headed Now?
    Fundamental Analysis

    Where's The Market Headed Now?

  2. Capitalizing On Seasonal Effects
    Active Trading Fundamentals

    Capitalizing On Seasonal Effects

  3. How The Power Of The Masses Drives The ...
    Active Trading Fundamentals

    How The Power Of The Masses Drives The ...

  4. Investing In Fads
    Personal Finance

    Investing In Fads

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center