Post #4928 by rayvt on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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looking at a 1 year chart of Nasdaq/S&P it seems to me momentum is petering out.

What does "momentum is petering out" mean?

Momentum is simply "The stock price now vs. a year ago."

If you are a momentum investor, you buy things that are highest YOY in favor of things that are lower YOY or even down YOY.

That's it. When/if things are not favorable, you sell and wait it out.

You don't need to try to predict or mind-read the market and other market participants. You don't need to fret about "a sign of everybody already being fully invested".

Just buy & sell according to what the stocks are doing, without trying to figure out WHY they are doing what they are doing.

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