Momentum Investing
InvestingGlossary term
Definition
A strategy of buying securities that have been performing well and selling those that have been performing poorly, based on the belief that price trends tend to continue. Requires active monitoring and disciplined entry and exit points.
Related terms
- Technical AnalysisEvaluating stocks by analyzing price charts, trading volume, and patterns to predict future movements. Based on the belief that historical patterns repeat. Contrasts with fundamental analysis.
- Growth InvestingAn investment strategy that targets companies expected to grow revenue and earnings at above-average rates, even if their current stock price appears expensive. Growth investors focus on potential future value rather than current metrics like dividends or low P/E ratios.
- Market VolatilityThe degree of price fluctuation in financial markets. High volatility means large price swings, indicating uncertainty or risk. Measured by the VIX (Volatility Index).
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