Top Down Stock Selection

Top Down Stock Selection | Definition

The process of structuring an equity portfolio based upon projections of future economic conditions. The top-down approach begins with an assessment of the overall economic environment and makes a general asset allocation decision regarding various sectors of the financial markets and various industries. The top-down manager then selects a portfolio of individual securities within the favored sectors. This method contrasts to the "bottom-up" approach which views specific company data as the primary consideration for stock selection.

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