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Zacks.com featured highlights include: Helen of Troy, SolarEdge, Kirkland and Royal Gold
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For Immediate Release
Chicago, IL – September 10, 2019 - Stocks in this week’s article are Helen of Troy Limited (HELE - Free Report) , SolarEdge Technologies, Inc. (SEDG - Free Report) , Kirkland Lake Gold Ltd. and Royal Gold, Inc. (RGLD - Free Report) .
4 Stocks with Momentum Anomaly to Buy Right Away
Of late, the increased market volatility, primarily due to the long-running trade tussle between the world’s two largest economies, has resulted in renewed panic for many investors.
While it may be difficult to remain calm during a steep market decline, it’s important to remember that volatility is part of investing. For long-term investors, reacting emotionally to volatile trends can be more damaging to portfolio performance than the downturn itself. By adhering to a well-thought-out investment plan, investors may be better off during periods of short-term uncertainty.
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 more 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 the prices. On the other hand, a few investors sell their winners way too early. And momentum investing is one of the best strategies to avoid making such mistakes.
Momentum strategy works because investors initially tend to underreact to news, events or data releases. However, once things become clear, they tend to go with the flow and overreact, causing dramatic price reactions.
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 that exists before the mean reversion occurs, i.e. before prices become rational again.
Momentum strategies have been known to be alpha-generative over a long period of time and across market stages. So obviously, this strategy is quite tricky to implement as detecting these trends well ahead of time is no child’s play.
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.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include: Helen of Troy, SolarEdge, Kirkland and Royal Gold
For Immediate Release
Chicago, IL – September 10, 2019 - Stocks in this week’s article are Helen of Troy Limited (HELE - Free Report) , SolarEdge Technologies, Inc. (SEDG - Free Report) , Kirkland Lake Gold Ltd. and Royal Gold, Inc. (RGLD - Free Report) .
4 Stocks with Momentum Anomaly to Buy Right Away
Of late, the increased market volatility, primarily due to the long-running trade tussle between the world’s two largest economies, has resulted in renewed panic for many investors.
While it may be difficult to remain calm during a steep market decline, it’s important to remember that volatility is part of investing. For long-term investors, reacting emotionally to volatile trends can be more damaging to portfolio performance than the downturn itself. By adhering to a well-thought-out investment plan, investors may be better off during periods of short-term uncertainty.
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 more 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 the prices. On the other hand, a few investors sell their winners way too early. And momentum investing is one of the best strategies to avoid making such mistakes.
Momentum strategy works because investors initially tend to underreact to news, events or data releases. However, once things become clear, they tend to go with the flow and overreact, causing dramatic price reactions.
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 that exists before the mean reversion occurs, i.e. before prices become rational again.
Momentum strategies have been known to be alpha-generative over a long period of time and across market stages. So obviously, this strategy is quite tricky to implement as detecting these trends well ahead of time is no child’s play.
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: https://www.zacks.com/stock/news/509443/4-stocks-with-momentum-anomaly-to-buy-right-away
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.