ELI5: Explain Like I'm 5

Quantitative investing

Quantitative investing is a special way of investing money where people use computers and math to help them decide which companies to buy stocks in.

So, let's say you wanted to invest your money into a company like Disney. A quantitative investor would use special formulas and computer programs to look at things like how much money Disney makes, how many people watch their movies, and how much their products cost.

They would use this information to make a "score" for Disney and compare it to other companies they are looking at investing in. The company with the highest score would be the one they would invest in.

It's kind of like if you were trying to decide what toy to buy at a store. You might look at how much it costs, how much fun other kids are having with it, and if it's made by a good toy company. A quantitative investor does something similar but with companies instead of toys.

Quantitative investing can be very helpful because it takes the emotions out of investing. People might get really excited about a company they've heard about in the news and buy stocks in it even if it's not doing well. Quantitative investing looks at only the facts and numbers, so it's less likely to make a bad decision based on feelings.