Usually, I’m a buy-and-hold investor. But I do dabble in momentum investing occasionally. One key factor in momentum investing is to pick climbing stocks beloved by large investors.
Another factor investors can use to determine whether equities are good momentum stocks to buy is whether they hold their own, even on days when the stock market is going down. Finally, even when buying momentum stocks, I try to avoid names trading at extremely high valuations. That’s because stocks with high valuations are more likely to plunge if bad news does surface.
This post originally appeared at InvestorPlace.