Different people with different personalities tend to suit a certain investment style.
Many times, growth investors don’t mind buying investments that are expensive. Expensive here means that the valuation for the investment is very high, where most investors will use financial indicators such as price earnings ratio to analyse them. Of course, value investors do extensive research into their historical financial performance and company news.Top-down investors look at investments based on the big picture and how it translates to making investment decisions. These types conduct rigorous analysis on the broader economy and see how it is faring.
From there, they will narrow down their investments to the best characteristics and further analyse the ins and outs of the companies, such as board member strength, management quality, and internal process controls. As you can tell, these investors do not actually need to understand the fundamentals or the fair value of these investments that much. Following the market is the mantra here, and they are always on the lookout for these kinds of opportunities in the market.Day traders are usually very quick in identifying patterns in price data and are typically good at multitasking.