Momentum Investing Research: Harnessing the Power of Market Trends
Momentum investing research has proven time and time again that strategies involving the purchasing of stocks or other securities demonstrating high returns over the past three to twelve months have added alpha over traditional buy-and-hold investment strategies.
This tactic has been leveraged by both professional investors and individual traders for many years, helping many to consistently outperform the stock market.
In this article, we will delve into the world of momentum investing research, exploring what it is, how it operates, and why it has been so successful.
What is Momentum Investing?
Momentum investing is a systematic investment approach that capitalizes on the continuance of existing market trends. This method entails buying securities that have exhibited an upward price trend and selling those with a downward trend. It operates on the assumption that securities that have performed well in the past will continue to excel, and those that have underperformed will continue to do…