Underweight (stock market)
Underweight (engl. Underweight ) and Overweight (engl. Overweight ) are terms from the stock-market or financial analysis .
To minimize the risk of loss, a stock portfolio should usually contain stocks that form a balanced mix of industries (e.g. energy suppliers, banks, food companies and industrial companies).
Underweight is a stock that makes up less of an investor's portfolio than would be the case in a balanced mix of stocks. An overweight stock makes up a larger proportion accordingly.
The terms overweight and underweight are of particular practical importance as investment recommendations. The financial analysts recommend the term "overweight" shares, which are in their opinion be after their performance significantly higher than the overall market, to buy. Conversely, they advise against buying with the judgment "underweight" or advise to sell.