Market Strategist

What Is a Market Strategist?

A market strategist is a financial professional who uses one of three broad categories to choose which asset classes — for example, stocks, mutual funds, bonds, or ETFs — to invest in. Those three categories are sentimental analysis, technical analysis, and company fundamentals or fundamentals analysis.

Understanding a Market Strategist

The term is relatively new in the financial arena, brought into the world from the need for enormous house brokerages and advisors to show clients future strategies and plans for a changing market landscape. Over the years, volatility has become the standard, leading to a broad change of philosophy from buy-and-hold to one that can adapt to different climates for profiting in bull markets and protecting when a bear rears its revolting head.

Examples of Market Strategies

Sentimental Analysts

Often referred to as contrarians, sentimental analysts are not yearning for a simpler time frame in the past; rather, they believe that markets are moved by investors' feelings more than their rational decision-production.

Market strategists and those who use sentimental analysis base numerous decisions on the assumption that the bulk of investors are off-base. For example, assuming that the price of gold is trending high, these strategists could take a short position believing that the valuable metal has reached its peak.

Technical Analysts

Technical analysis involves buying any asset class based on genuine data that reflects price movement, moving averages that identify up and down trends and resistance levels, etc. These can take the form of line, candlestick, point, or bar charts, among others. This is generally closely aligned with market timing where buy and sell signals are triggered on a genuinely regular basis.

Fundamentals Analysts

At last, market strategists often have an eye on company fundamentals, like one of the best investors ever: Warren Buffett. While his Berkshire Hathaway holding company portfolio changes now and again, his philosophy for buying stocks is projected is based on value found in the fundamentals.

Fundamental analysts center around what they can be familiar with a company today, and don't often take hypothetical "questions" into account. They tend to take a gander at a company's financial statements alongside its size, market share, profit edges, return on equity, earnings, free cash flow, debt and price relative to earnings, and book value. These market strategists believe that fundamentals eventually pay off and can really protect against uncertainty in the market.

A Blend of Strategies

However these systems are broken into three components, market analysts will often employ a combination of them when settling on conclusions about how to invest their own or their clients' money.

Investment banks, brokerage firms, and financial services companies regularly employ market strategists. Despite what these professionals claim, anticipating the movement of stocks and other financial instruments isn't really possible. As indicated by William J. Bernstein's book The Four Pillars of Investing, market strategists have historically been incorrect around 77% of the time.

Highlights

• The three major types of scientific frameworks market analysts use are sentimental, technical, and fundamental.
• Technical analysts center around price movements of assets as they are reflected in charts.
• Fundamental analysts take a gander at a company's fundamentals, like its debt-to-income ratio and its sales growth, to make a decision on whether the company is a decent buy or not.
• Sentimental analysis begins from the assumption that most investors are off-base. They are additionally called contrarian analysts.

FAQ

Is a Market Strategist the Same Thing As a Marketing Strategist?

No. A market strategist is an investment professional who manages the overall strategy of a portfolio. A marketing strategist, then again, is responsible for the advertising and marketing strategies of a company.

How Might I See Who Is the Best Market Strategist?

CNBC runs a regular survey of over 500 market strategists based on their targets for the S&P 500 index as well as the implied EPS and P/E of the index for each year-end. You can see how they stack up here.

How Does a Market Strategist Respond?

A market strategist determines the best investing style for a particular fund or portfolio. Then, the strategist provides practical activities or investment recommendations based on that overall strategy given the best available research and market conditions.