Zacks.com Featured Highlights Include: Kirkland Lake Gold, Target And Guardant Health
Zacks Investment Research | Dec 01, 2019 09:19PM ET
For Immediate Release
Chicago, IL – December 2, 2019 - Stocks in this week’s article are Kirkland Lake Gold Ltd. (TSX:KL) , Target Corp. (NYSE:TGT) and Guardant Health, Inc. (NASDAQ:GH) .
Top 3 Momentum Anomaly Stocks to Buy for Healthy Profits
The global growth slowdown that began in early 2018 is expected to end soon, thanks to easier financial conditions and a likely end to the tariff war. Slightly better growth, limited recession risk, and friendly monetary policy should provide a decent background for financial markets in early 2020.
The U.S. equity market has been on fire this year with the S&P up 24.6%, the Dow rallying 20.7%, and the Nasdaq gaining 31.2% year to date. But this should not be a surprise to investors as the U.S. economy is strong and the job market is at its best in nearly five decades.
However, concerns about the impact of higher corporate taxes on profits could rise in the runup to the U.S. presidential election. This apart, rising wages is likely to reduce profit margins over the next several years.
As a general rule of investing, reacting emotionally to volatile trends can cause more damage to a portfolio’s return than the downturn itself. That said, when value or growth investing fails to fetch sustained profits, one should explore another time-tested winning strategy that simply bets on the frontrunner stocks. This is known as momentum investing.
At the core, momentum investing is buying high, selling higher. It is based on the idea that once a stock establishes a trend, it is likely to continue in that direction. There’s a whole list of behavioral biases that most investors exhibit. For instance, there are investors who are anxious about booking losses and hence, hold on to losing stocks for too long, hopeful of a rebound in prices.
On the other hand, a few investors sell their winners way too early. Momentum investing is one of the best strategies to avoid making such mistakes. So, basically, it’s a way to profit from the general human tendency to extrapolate current trends into the future. Momentum investing is, thus, based on that gap in time which exists before the mean reversion occurs i.e. before prices become rational again.
Here, we have created a strategy that will help investors get in on these fast movers when there is a short-term pullback in price, and rake in handsome gains.
For the rest of this Screen of the Week article please visit Zacks.com at: Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.