Introduction to Buying the Unloved

It can be hard to turn your back on a winner. Investors usually flock to those parts of the market with great returns. But chances are, those stellar returns won’t last forever. Sears is no longer the nation’s preeminent retailer, Seinfeld is no longer a top prime-time sitcom, and few of us are still walking around in double-breasted suits with ultra-wide ties.

Play against the crowd, though, and you just may catch a future trend today. Fund investors, as a group, have lousy timing. Most investors buy high and sell low, instead of the other way around. Opportunists therefore have the potential to profit by buying what everyone else is selling.

So here’s how to be an opportunist, the Morningstar way.