Last week, London was hit by the ‘Beast from the East’, that brought with it unseasonably low temperatures. Predictably, transport ground to a halt in the face of a few centimetres of snow. Snow is a useful analogy for momentum investing: imagine a snowball rolling down hill, gathering more snow as it goes, which in turn causes it to roll faster, and so on. In the same way, we observe virtuous cycles in companies’ performance: i.e. winners keep on winning.
Stephen Nguyen (CFA) of Momentum Global Investment Management, one of our UK regulated, discretionary fund managers, discusses momentum investing. Click here to learn more.