top-down

Definition

An investment strategy which first finds the best sectors or industries to invest in, and then searches for the best companies within those sectors or industries. This investing strategy begins with a look at the overall economic picture and then narrows it down to sectors, industries and companies that are expected to perform well. Analysis of the fundamentals of a given security is the final step.

Use top-down in a sentence

You should try and see if using a top-down method will make things easier for you in the long term future.

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While objections on the ground held some validity it was important to remember that a top-down view yielded a different perspective.

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Instead of relying on the prowess of its stock-pickers, the fund took a top-down approach, issuing new sector and industry weightings each target.

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top up bottom-up