Multiple outlets present commentary on how different investment styles perform for retail investors. The focus is on “momentum investing,” which seeks to buy assets that have recently been performing well and can create the perception that current winners will keep outperforming. In contrast, “contra investing” targets sectors or assets that have fallen out of favour, aiming to benefit from potential mean reversion or future improvement. The articles cite finance professional Kirtan Shah, who argues that retail investors tend to lose more money with momentum strategies. The reasoning presented is that chasing recent gains can expose investors to sharp reversals when momentum fades, particularly for individuals who may not have the tools or time to monitor changing market conditions. The commentary also implicitly contrasts this with the alternative approach of buying out-of-favour assets, which may carry different timing and risk characteristics. Overall, the sources frame the issue as a suitability and risk-management question for retail investors rather than a definitive claim about which style always outperforms in all markets.
Commentary highlights risks of momentum investing for retail investors
Multiple outlets present commentary on how different investment styles perform for retail investors. The focus is on “momentum investing,” which seeks to buy assets that have recently been performing...
- The discussion compares momentum investing with contra investing.
- The commentary says retail investors are more likely to lose money with momentum investing.
- The analysis is attributed to Kirtan Shah.
- Momentum investing involves buying assets that have recently performed well.
- Contra investing focuses on buying assets or sectors out of favour.
Should you chase winning sectors or buy what's out of favour? Here's why Kirtan Shah believes retail investors are better off avoiding momentum investing.
3 hours agoShould you chase winning sectors or buy what's out of favour? Here's why Kirtan Shah believes retail investors are better off avoiding momentum investing.
3 hours ago
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