Marietta Area Chamber of Commerce

Page 8 Marie a Area Chamber of Commerce Sponsored Advertisement Hall Financial Advisors, LLC 1101 Rosemar Road, Suite A, Parkersburg, WV 26105 416 Hart Street, Suite A, Marietta, OH 45750 TOLL-FREE: (866) 865-4442 When it comes to which investment strate- gies to employ, people generally fall into two camps: "bottom-up investing" or "top- down investing." While both investment strategies have merits and drawbacks, incor- porating them in tandem may help you achieve a balanced, diversified portfolio. But first, what are bottom-up investing and top-down investing? Bottom-up investing: Evaluating compa- nies based on their brand and product strength, regardless of what the market is doing. Top-down investing: Focusing on broad economic sectors to determine which may benefit from current and anticipated eco- nomic conditions. Understanding top-down investing A top-down investing strategy begins by looking at key economic factors, such as GDP, inflation, and interest rates. "You're looking more at macroeconomic benefits and weaknesses," explains Scott Wren, a Senior Global Equity Strategist for Wells Fargo Investment Institute. An investor employing this investment strat- egy will use this big-picture knowledge to select a promising country or region, and then analyze industries and sectors within that area. Once they find a favorable sector, they'll select attractive companies operating in that field. With this strategy, it's important to look at "where the economy is going, and which sectors and companies are going to benefit from where the economy is going," says Wren. For example, when consumer confi- dence is higher and people are likely willing to spend more on furniture and other nones- sential items, sectors such as Consumer Discretionary tend to perform better. One advantage of top-down investing is that having a focus on the economy's perfor- mance allows you to understand more about how individual companies operate. "[Corporate] earnings are a product of the economic environment," says Wren. And corporate earnings typically have a signifi- cant impact on a company's stock price. Understanding bottom-up investing A bottom-up investing strategy begins on the other end of the spectrum. Rather than strategies," says Wren. It's good, on the one hand, to under- stand an individual company before investing in it. By understanding its financial reports, you increase your knowledge of whether or not the firm is in a solid financial position or if it has a lot of debt relative to its peers. At the same time, having an under- standing of where the economy is going is key, adds Wren. Some companies are more sensitive to changes in the envi- ronment than others. Utility stocks, for instance, might remain stable in a down economy. "You'll heat your home whether the economy is good or bad," says Wren. Discuss these two investment strategies with us. We can put them in the context of your overall portfolio and provide advice and guidance about areas of op- portunity and how you may need to adjust your strategy based on economic conditions. surveying the global environment, inves- tors start with individual companies. They may study the company's balance sheet, income statement, or reports to learn its strengths, weaknesses, and overall financial stability. Once they find a strong option with solid prospects compared to others in its niche, they will invest in the company. A potential drawback to the bottom-up in- vesting strategy, however, lies in the risk of overlooking macroeconomic factors. Inves- tors taking the bottom-up approach may not focus on the environment the company is going to be operating in, explains Wren. A great company could have a solid balance sheet and income statement, but if it enters an environment that is not ideal for its growth and performance, its bottom line could suffer. Finding a balance When it comes to investing, "the ideal situ- ation is to have some combination of top- down and bottom-up investment Do you know the difference between bottom-up and top-down investing? This adver sement was wri en by Wells Fargo Advisors Financial Network and provided to you by Chris Hall, Managing Principal. Investments in securi es and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC, Member SIPC, a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company. © 2018 Wells Fargo Advisors Financial Network, LLC. All rights reserved. CAR-0917-00767 Risk Factors—All inves ng involves risks including the possible loss of principal. Equity securi es are subject to market risk which means their value may fluctuate in response to general eco- nomic and market condi ons and the percep on of individual issuers. Investments in equity securi es are generally more vola le than other types of securi es. Disclaimers—Global Investment Strategy (GIS) is a division of Wells Fargo Investment Ins tute, Inc. (WFII). WFII is a registered investment adviser and wholly-owned subsidiary of Wells Fargo & Company. The informa on contained herein cons tutes general informa on and is not directed to, de- signed for, or individually tailored to, any par cular investor or poten al investor. This report is not intended to be a client‐specific suitability analysis or recommendation, an offer to par ci- pate in any investment, or a recommenda on to buy, hold or sell securi es. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant informa on, including your exis ng por olio, investment objec ves, risk tolerance, liquidity needs and investment me horizon. Wells Fargo Advisors is registered with the U.S. Securi es and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial ser- vices regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based finan- cial services account(s) with Wells Fargo Advisors may not be afforded certain protec ons con- ferred by legisla on and regula ons in their country of residence in respect of any investments, investment transac ons or communica ons made with Wells Fargo Advisors.

• Cover