Investors love hottest stocks and continue to pour money into them. While the popular finance theory “random walk” suggests that the past movement of the price of a stock cannot be used to predict its future movement, history shows that recent past performance can be a pretty good predictor of short-term future performance.
Momentum effect, which refers to the tendency of winning stocks to keep winning, has been documented in many academic studies. Enthusiastic investors chase high fliers, even ignoring fundamentals at times.
There are a number of ETFs available to investors to ride these trends. These ETFs have done pretty well this year as stocks continue to rise thanks to the booming economy, tax cuts, and excellent earnings reports.
To learn about the iShares MSCI USA Momentum Factor ETF (MTUM - Free Report), the First Trust Dorsey Wright Focus 5 ETF (FV - Free Report) and the PowerShares DWA Momentum ETF (PDP - Free Report), please watch the short video above.
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and ...
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader's level of experience should be carefully weighed before entering the Forex market. There is always a possibility of losing some or all of your initial investment / deposit, so you should not invest money which you cannot afford to lose. The high risk that is involved with currency trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Forex Crunch or on other sites that have received permission to republish the content originating on Forex Crunch reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Forex Crunch's authorized authors. Forex Crunch has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote or any other information contained on Forex Crunch and permitted re-published content should be taken as general market commentary. This is by no means investment advice. Forex Crunch will not accept liability for any damage, loss, including without limitation to, any profit or loss, which may either arise directly or indirectly from use of such information.