Bottom-Up Approach To Investing

An investing strategy that de-emphasizes the significance of economic and market cycles in favor of a focus on the analysis of individual stocks rather than on industries. The strategy searches for outstanding performance of individual stocks.

In a bottom-up analysis, an investor looks at a company's market prospects, sales growth, profitability, cash flow, debt ratio, price earnings valuations and dividend yield. A company’s numbers are then compared to that of its competitors to decide which stock offers a more attractive investment opportunity.