DeutschWhat is Contrarian Investing?
Contrarian investing is a strategy that involves going against prevailing market trends or sentiments, buying when others are selling and selling when others are buying.
Explanation:
This approach challenges herd mentality, capitalising on situations where fear and greed cause markets to misprice assets. Contrarians seek opportunities in undervalued stocks, anticipating that market sentiment will eventually correct.
Practical Example of Contrarian Investing:
During a market downturn, while most investors are selling off their holdings in panic, a contrarian investor buys undervalued stocks, expecting that the market will eventually rebound and correct the prices.
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