Q: What Are Your Thoughts on Momentum Investing?

Q: What are your thoughts on momentum investing?

 A: According to Investopedia, momentum investing is a system of buying stocks or other securities that have had high returns over the past three to 12 months, and selling those that have had poor returns over the same period. I use momentum investing as part of my market-timing portfolio. The returns and risk are very similar to a broadly diversified buy-and-hold strategy. The standard deviation is a bit higher than buy and hold, as is the return. All market-timing strategies tend to be less tax-efficient so should be used in tax-deferred accounts.