BrandView
This story is sponsored by Zions Direct. Learn more about Zions Direct.
Contrarian investing is an ideology in which the investor chooses to make investment decisions that go against popular consensus. Normally, the up and downward movements of the market are strong indications of market trends.
When the stock is going down, it generally means that fellow investors are bearish (pessimistic) and will sell in fear that prices will continue to drop. When the stock is going up, it generally means that fellow investors are bullish (optimistic) about future prices, and will buy more.
Contrarian investors do not follow these trends and signals. Rather, they do opposite of what the majority of investors do. They sell when stocks are high (and most are buying), and buy when stock prices are low (and most are selling). The reason this is done is because they believe they are able take advantage of what they think is a mispricing of a stock.