Stock picking - Financial definition

Stock picking involves in-depth research and analysis of companies to identify stocks that are expected to deliver superior returns compared to the overall market or a benchmark index. Investors use fundamental analysis, such as evaluating financial statements and management quality, and technical analysis, which includes studying price charts and market trends. Professional fund managers and individual investors alike engage in stock picking to construct portfolios tailored to specific investment strategies, such as growth, value, or dividend investing. The practice contrasts with passive investing, where one might invest in index funds that aim to replicate market performance.