Momentum

Category: Quant Insight

Short-term momentum is still a drag on every asset class. Developed ex US stocks are starting to weaken in the long-term as well. We believe riskier assets such as stocks and credit should continue to perform well given the strength of the global economy, however the market might begin to differentiate in the near-term.

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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