Contrarian investing is a strategy adopted based on the premise that a market, sector, or stock is not going to move in the direction that is expected by the majority of market participants.
Contrarian investing is a strategy that has its inherent risks but the gains made by such investors can be substantial. However, practitioners of contrarian investing are important as they can provide liquidity when it is most needed.
Related Terms: Value Investing – Wall Street – Stock Market Timing – Stock Market Indicators