Top-down investing involves analyzing the "big picture". Investors using this approach look at the economy and try to forecast which industry will generate the best returns. These investors then look for individual companies within the chosen industry and add the stock to their portfolios. For example, suppose you believe there will be a drop in interest rates. Using the top-down approach, you might determine that the home-building industry would benefit the most from the macroeconomic changes and then limit your search to the top companies in that industry.
Read more: What's the difference between "top-down" and "bottom-up" investing? http://www.investopedia.com/ask/answers/193.asp#ixzz3m0ahNXjf
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