The terms "top-down" and "bottom-up" describe a process by which investors go about analysing the financial markets and proceeding to choose desired investments. Some investors combine both approaches in their process; the important thing to note here is that no one way is better than the other. You may have once heard of terms like "top-down" and "bottom-up.
For more than 50 years, psychology has been dominated by a top-down research strategy in which a simplistic account of the hypothetico-deductive method is paired with null hypothesis testing in order to test hypotheses and theories. As a consequence of this focus on testing, psychologists have failed to pay sufficient attention to a complementary, bottom-up research strategy in which data-to-theory research is properly pursued. This bottom-up strategy has 2 primary aspects: the detection of phenomena, mostly in the form of empirical generalizations, and the subsequent understanding of those phenomena through the abductive generation of explanatory theories.
Quite simply, bottom-up investing focuses on individual securities rather than on the overall movements in the securities market or the prospects of particular industries. The bottom-up approach assumes that individual companies can do well even in an industry that is not performing very well. This is the opposite of another approach, called top-down investing.
The American dream is built on the promise of upward social mobility. In the middle of the 20th century, rates of upward mobility improved across the socioeconomic spectrum. But over the course of the past 30 years, the vast majority of our population has seen mobility rates stagnate.
In logic, we often refer to the two broad methods of reasoning as the deductive and inductive approaches. Deductive reasoning works from the more general to the more specific. Sometimes this is informally called a "top-down" approach.
Top-down and bottom-up are both strategies of information processing and knowledge ordering, used in a variety of fields including software, humanistic and scientific theories see systemicsand management and organization. In practice, they can be seen as a style of thinking, teaching, or leadership. A top-down approach also known as stepwise design and in some cases used as a synonym of decomposition is essentially the breaking down of a system to gain insight into its compositional sub-systems in a reverse engineering fashion.
Data projects are generally organized in one of two ways: top-down that is, starting with the business question or bottom-up starting with the data and working up to insights. Let's take a look at these approaches one at a time from the perspective of a financial institution that offers lines of personal credit. In this approach, you might start with an initial belief that fraudulent transactions are a serious problem for your company.
We've developed a new product, are about to take it to market, and need to develop a market analysis for our business plan. Which forecasting approach is better: top down or bottom up? Understanding market size, and understanding your ability to penetrate that market, is all-important: If your market is too small you can't make money, no matter how innovative the product or how competitive your pricing.
They will also look at the performance of sectors or industries. These investors believe that if the sector is doing well, chances are, the stocks in those industries will also do well. A top-down investor might look at rising interest rates and bond yields as an opportunity to invest in bank stocks.
Cells in a group, for example, can sense or respond to external stimuli that an individual cell cannot identify. Read more…. While reconstituting molecular-scale processes is useful in certain cases — engineering the genetic circuits responsible for cell communication is sufficient to control 3D tissue shape, for example — he believes that in order to shed light on what happens at the level of the biological system, experiments should probe tissues at multiple length- and timescales through both mechanical and biochemical manipulation.