Myths, Fact, Fiction About Momentum
- Posted by Frank Zorrilla
- on August 9th, 2014
There’s so many myths in the market place, mostly coming from people who have failed investing/trading a certain way or are only allowed or want to do a certain type of investing. It’s like a manager who only runs a long only gold fund that has to be fully invested at all times, he will obviously like gold under every circumstance and cycle. Or a bank stockbroker who can only recommend mutual funds, of course he will steer you away from individual stocks, he will give you every reason on why its stupid to buy individual equities.
There has always been myths about momentum trading which has been around for 200 years and its probably one of the few strategies you can actually quantify. There’s a million way to skin a cat; value investing, momentum trading, buy and hold, asset allocation, mean reversion, etc…It all comes down to risk management, avoiding large draw-downs, and finding out what strategy best suites your personality. But always be wary of those one way street guys, the ones that tell you it can only be done “this way” and every other way is a fools’ approach.
Fact, Fiction and Momentum Investing academic study will tell you all you need to know about momentum trading, enjoy.
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Frank Zorrilla is the founder and chief investment officer of Zor Capital LLC.He began his Wall Street career 10 days after his 20th birthday when he became a Series 7 licensed stock broker. More »
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