Momentum | August 22, 2017

Category: Quantitative Insights

Short-term momentum is starting to diverge from long-term momentum for most asset classes. This tends to signal caution but not a bear market so we think it is important to see how this market unfolds.

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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