Momentum

Category: Quant Insight

Momentum continues to favor risky assets such as stocks and commodities. We believe the strength of foreign currencies and the positive momentum for foreign stocks, especially emerging markets, will likely continue in the near future.

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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