Top-Down Investing

Top-Down Investing is an investment strategy that begins with analyzing the macroeconomic environment before moving to specific sectors and then selecting individual Stocks. This approach emphasizes the overall Economic Indicators such as GDP growth, Interest Rates, and geopolitical factors, which can impact entire markets or sectors. For instance, an investor might first assess the global economy’s health, then identify that technology sectors are poised for growth due to increased digital transformation, and finally choose Stocks like Apple or Microsoft based on their strong fundamentals and market positioning.