What is contrarian investing?

Contrarian investing is a form of active investing, since contrarians seek to outperform the market rather than keep pace with the market’s gains. Contrarian investing also aligns more closely with long-term investing than day trading, because contrarians often have a timeline that’s weeks, months or years long.

Should a contrarian invest in a stock market?

If the prevailing market sentiment is that the pace of economic growth will accelerate, for instance, spurring more market gains, a contrarian could decide to make investments predicated on the idea that the economy won’t accelerate, and that stock prices will decline.

How do I become a contrarian investor?

The starting point for contrarian investing is to thoroughly understand the consensus view. This can be for an individual stock, a broader stock market sector or the market as a whole. Then a contrarian investor pokes holes in the consensus, and develops an argument that underscores their contrarian view.