It’s hard to predict whether a stock will do well. Many investors simply follow the trend: buying high in order to sell even higher. This momentum strategy is a valid one. Like a freight train, a moving stock is hard to stop — there must be a very good reason for a high-momentum stock to stop in its tracks and head in the opposite direction. This is a strategy that can be surprisingly difficult to execute, though. Fundamentally, good stock analysis is still required. You cannot simply buy the hottest ticket out there on the expectation that it will continue… Read More
It’s hard to predict whether a stock will do well. Many investors simply follow the trend: buying high in order to sell even higher. This momentum strategy is a valid one. Like a freight train, a moving stock is hard to stop — there must be a very good reason for a high-momentum stock to stop in its tracks and head in the opposite direction. This is a strategy that can be surprisingly difficult to execute, though. Fundamentally, good stock analysis is still required. You cannot simply buy the hottest ticket out there on the expectation that it will continue moving — not if you take investing seriously. A big picture, too, can change on a dime: the world out there is unpredictable, and nobody can know whether bad news is coming. And psychologically, it might be difficult to keep buying an uptrend when the market trades at fresh all-time highs amid a barrage of macroeconomic worries. Another strategy is to look for bargains. Those stocks might not be the market’s darlings and might not have the trend-related wind at their backs, but it should not necessarily mean that they have no potential. A real bargain — a fundamentally strong… Read More