Talk:Overweight (stock market)

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Contradiction[edit]

Sorry, don't know how to edit pages or even which answer is correct.

Two articles:

The examples seem to contradict each other... one says you should increase and one says you should decrease stock holdings. —Preceding unsigned comment added by Manapotion (talk • contribs) 13:20, July 24, 2007

I think that's the point.

Overweight means you should increase your holdings because the stock is undervalued at this point.
Underweight means you should decrease your holdings of this stock because it is overvalued.

At least that's how I understood it.. —Preceding unsigned comment added by 63.107.135.125 (talk) 21:35, 23 September 2008 (UTC)[reply]

The pages don't contradict each other, and they're correct. —Preceding unsigned comment added by 128.122.20.81 (talk) 18:22, 24 February 2009 (UTC)[reply]

Usage of "overweight" and "underweight"[edit]

The article is not entirely misinformed, and the main body is correct, if incomplete, but in the examples it is in danger of confusing recommendation with statement of fact.

The bald statement "High Tech is overweight" is ambiguous. There is a crucial difference between "I recommend you to go overweight in High Tech," and "your portfolio is overweight in High Tech." When a equity analyst recommends investors to "go overweight in High Tech," he means that in his opinion, share prices in the High Tech sector have the potential to perform better than the average in the market, whereas when your broker tells you "your portfolio is overweight High Tech," he is not expressing an opinion at all. He is stating a fact. He is informing you that High Tech shares make up a larger proportion of your portfolio than they do in the market index (the market index against which your portfolio is being compared, or "benchmarked"). Whether that is a good strategy or not is another matter, depending on whether the analysis that High Tech should be "overweight" is correct or not. "High Tech is overweight" could mean either of these. -- Jonazo (talk) 14:51, 1 September 2009 (UTC)[reply]