What is Top down and Bottom up approach while investing?

While performing the fundamental analysis of companies, two of the most common strategies to research stocks that are used by investors are top down and bottom up approach. Top down and bottom up are entirely different approaches to analyze and invest in stocks. However, both have their own advantages and disadvantages. The top-down approach first looks at the broader economy and macroeconomic factors, and then move to the specific industry and the company within. On the other hand, the bottom-up approach starts at the company level and later moves up for the other important details.