Momentum Investing

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Investment U offers this good, succinct explanation of the kind of investing I use to identify stocks and ETFs worthy of evaluation:

 “Momentum stocks are, by definition, the fastest-growing companies – and the most rapidly moving stocks—in the market. There's nothing mysterious about them. Quite simply, they lead virtually all other companies in terms of sales growth, operating margins, profitability and ‘relative strength.’

Have you or your spouse ever shopped at Wal-Mart? The company's shares rose 40,232% during the last bull market. That's enough to turn $10,000 into more than $4 million.

“Have you or your company ever bought a Microsoft software program like Word, Excel or PowerPoint? The stock rose 61,034% in the 13 years following its IPO. That turned a $10,000 investment into more than $6.1 million.”

Momentum is measured by different people in different ways. At Balliett Financial Services, Inc., we produced good results through Phil Balliett’s design and software. Now that I’m retired, I’m using an approach of my own, broadly similar to his—not for selected stocks and funds but rather to identify securities worthy of evaluation.

Never forget: All investments and savings are gambles on the unknown future and thus subject to loss.