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Momentum Funds

Definition of 'Momentum Funds'

Momentum has gotten a reputation as a nasty word, partly because the strategy hasn't been successful in the past couple of years, and partly because it is an investment strategy focused on stock movement more than the underlying companies. Convene the Un-American Activities Committee!

In momentum investing, money managers are looking for stocks with earnings and/or price momentum in the relatively short term, with little regard for the underlying company or its value compared with the stock price.

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