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:
Contrarian investors believe that crowd behaviour leads to mispricings in the market. By acting opposite to the majority, they aim to capitalise on market corrections when the general sentiment proves to be wrong.
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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