Individual shares and companies are researched and analysed, and investments are made based on forecasts on their future evolution, rather than based on market and economy cycles.

This investment strategy is best used when the investor is close to and familiar with the market. It is not a recommended strategy for those who make investments on a global scale.

It considers factors that may affect individual companies, such as their financial situation, demand and supply, and other performance indicators over specific periods of time. Less attention is being paid to the industry the company operates in or general market or economy conditions. By making bottom-up investments, the investors will know in detail the situation and characteristics of the stock they posses, allowing them to make better informed decisions in bad markets.

For long term traders this strategy is also not a good option, because, in time, market and economic conditions could pull the stocks down, while with shorter term investments this risk is considerably reduced, as the market can have little impact on a stock in only a few weeks.

Bottom-up investors believe that intimate knowledge of how markets work is not mandatory in order to make profit. As such, they make separate assessments of each stock and pick out those they judge to have the desired future prospects. For this reason, bottom-up investors have often been perceived to be against the trend.