- An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
This strategy looks to capture gains by riding "hot" stocks and selling "cold" ones. To participate in momentum investing, a trader will take a long position in an asset, which has shown an upward trending price, or short sell a security that has been in a downtrend. The basic idea is that once a trend is established, it is more likely to continue in that direction than to move against the trend.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Momentum investing — Momentum investing, also sometimes known as Fair Weather Investing , is a system of buying stocks or other securities that have had high returns over the past three to twelve months, and selling those that have had poor returns over the same… … Wikipedia
Momentum (finance) — This article is about the concept related to asset prices. For other uses of momentum in finance, see Momentum (disambiguation). In finance, momentum is the empirically observed tendency for rising asset prices to rise further, and falling prices … Wikipedia
Contrarian investing — In finance, a contrarian is one who attempts to profit by investing in a manner that differs from the conventional wisdom, when the consensus opinion appears to be wrong. A contrarian believes that certain crowd behavior among investors can lead… … Wikipedia
Value Investing — (engl.) bzw. wertorientiertes Anlegen (dt.) ist eine Anlagestrategie, bei welcher der Anleger versucht, durch aktives Stock Picking Aktien zu kaufen, die er für unterbewertet hält, um damit eine überdurchschnittliche Rendite zu erzielen. Zur… … Deutsch Wikipedia
Socially responsible investing — Alternative Energy: One of many forms of sustainable investing Socially responsible investing (SRI), also known as sustainable, socially conscious, or ethical investing, describes an investment strategy which seeks to consider both financial… … Wikipedia
Quality investing — is an investment strategy based on clearly defined fundamental factors that seeks to identify companies with outstanding quality characteristics. The quality assessment is made based on soft (e.g. management credibility) and hard criteria (e.g.… … Wikipedia
Mechanical Investing — Buying and selling stocks according to a screen based on predetermined criteria, usually with the help of technical indicators such as relative strength or momentum. This method allows traders to enter transactions without emotion and backtest… … Investment dictionary
Day trading — This article is about the practice. For the occupation, see Day trader. Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close… … Wikipedia
Verhaltensökonomik — Die Verhaltensökonomik (engl. Behavioral Economics) ist ein Teilgebiet der Wirtschaftswissenschaft. Sie beschäftigt sich mit menschlichem Verhalten in wirtschaftlichen Situationen. Dabei werden Konstellationen untersucht, in denen Menschen im… … Deutsch Wikipedia
Market trend — Statues of the two symbolic beasts of finance, the bear and the bull, in front of the Frankfurt Stock Exchange. A market trend is a putative tendency of a financial market to move in a particular direction over time. These trends are… … Wikipedia