Investors often turn to momentum stocks, seeking high returns from companies that have historically performed well. However, over the past year, these stocks have failed to keep pace with the broader market.
The definition of momentum stocks is straightforward: they are those with the best trailing-year returns. Historically, a portfolio of such stocks has outperformed the broad stock market. Yet, in recent years, this advantage has dwindled. Momentum stocks now struggle to even match the S&P 500’s performance.
Despite their historical success, momentum stocks have changed their fortunes recently. Investors should exercise caution when using these strategies in their investment portfolios.
Source: https://www.marketwatch.com/story/how-to-win-the-high-momentum-stock-game-922ba57b