Momentum

Category: Quant Insight

Momentum is still fairly weak among most asset classes. We believe this is probably the reason for the general sideways movement among stocks in December. Overall the stock markets look healthy, so January will be a good indicator for the future of stocks.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based on momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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