Chasing momentum can be bad for your wealth

I don’t like the recent stock moves.

In the chart below, U.S. listed Olaplex has risen 26% in the past 7 trading days.

Short covering, momentum buying, benchmarking pressure….blah blah blah….are all some reasons for the spike in many stock prices over the past few days.

Heck, Citigroup has climbed 18% in 4 days,

Following a challenging couple quarters or lagging performance and lower fees, do you think is plausible fund managers lock in those gains, especially considering the comparative return of cash or the index?

Look for these types of stocks to give up perhaps half of the recent gains, in the coming days.

July 21, 2022

by Rob Zdravevski

rob@karrriasset.com.au

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