There is an approach that the biggest hedge funds and investment banks use in their daily operations to come up with the best trade and investment ideas, and it is what most might call a “top-down” approach. In this methodology, analysts are tasked with breaking down trends in the global economy, industries, and other indicators to know where to start looking in the first place.
Luckily, retail investors don’t have to be part of a hedge fund or an investment bank to copy this methodology and approach, as today, there is one clear trend pointing to the finance sector. Through the services PMI index, and its industry breakdowns, there is a clear trend favoring the finance space and its expansion during the past three months, meaning the odds of rising earnings for the next quarterly announcement are higher, and that means higher stock prices.
