Is momentum investing a viable strategy for individual investors?
DOI:
https://doi.org/10.61190/fsr.v15i3.4857Keywords:
Individual investors, Momentum investingAbstract
Momentum investing is the practice of investing in securities that have substantially outperformed the market in recent periods. This paper examines the stock selections of two groups of investors, professional analysts and individual investors, made in the well-researched dartboard contest con ducted by the Wall Street Journal. We find that both groups exhibit a strong tendency to select momentum securities, with the individual investors concentrating on securities with extreme momen tum. The professional analysts are successful with the momentum strategy but the individual investors are not. We conclude that momentum investing is not a viable strategy for individual investors.
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