contrarian investing

Definition

Contrarian Investing
Contrarian investing is an investment approach that deliberately defies prevailing market sentiment. Rather than following the crowd, contrarian investors seek opportunities by buying securities during widespread pessimism and selling amid overexuberance. They believe that market overreactions cause prices to stray from intrinsic values. This strategy requires independent research, discipline, and a strong conviction to stand apart from consensus views. By betting against market trends, investors hope to capture reversals when fundamentals eventually reassert themselves. The approach is inherently patient, as initial market sentiment may persist longer than expected, and it demands a focus on long-term value rather than short-term fluctuations, making careful risk management critical to success.

See also