Momentum strategy – achieving long-term returns

What is meant by momentum and the trend strategy?

“In simple terms, momentum is the price change or performance of a financial instrument over a certain period of time.”

Momentum” occurs when the price of a share rises or falls over a certain period of time. Such a performance shows the direction in which a share has moved within a selected period of time and the momentum it is taking. Negative momentum occurs when the price of a share falls. Positive momentum occurs when it rises. And the more pronounced it rises, the more potential the upward trend has.

With the momentum strategy, we use precisely these trend strengths and invest in the so-called “winners” on the financial markets. Based on mathematical models, our investment professionals find the strongest stocks with the momentum strategy and thus ensure that you invest in securities that are profitable in the long term. At the same time, you avoid the weakest stocks.

Your advantages with Point Capital and our investment services:

• Individual momentum strategy tailored to your goals and requirements
• Active (risk) management for greater security and success
• Many years of experience and qualified investment experts
• Systematic investment solutions based on sound foundations
• Full flexibility – to exploit the opportunities of strong momentum and avoid risks
• Access to global market potential

Why use the momentum trading strategy?

When it comes to equities, the momentum strategy is an excellent choice for identifying and investing in trends. We know from experience that the probability of a trend continuation is higher than a trend reversal. Even so-called sideways trends, which “reduce” profits in a trend-following strategy, are rarer than upward or downward trends.

This in turn is sometimes due to the fact that an upward trend always benefits from herd instinct. So when a share rises, the price picks up speed as more and more buyers invest in it. This creates “momentum”.

However, since every trend is also subject to a finite period, we ensure continuous monitoring of the momentum strategy for you.

Implementing a momentum strategy – with Point Capital

At Point Capital, we implement the trend strategy for equities as part of our asset management. We use low-cost ETFs (exchange-traded funds) and pursue a dynamic approach when calculating momentum values,based on at least three time periods , which we look at more closely depending on the volatility environment. If you would like to find out more, we will be happy to explain this to you in more detail in a personal meeting.

“Once you have decided on a strategy, you have to stick to it – regardless of the current situation on the financial markets or what topics are currently filling the daily newspapers.”

Your momentum strategy, your return, your freedom

One thing remains to be said: The momentum strategy is a convincing investment strategy. Regardless of whether you want to focus on a trend strategy or opt for one of the multi-asset solutions, one of the most important factors for success on the financial markets is discipline. You should therefore be aware that the motto “good things take time” applies to the momentum strategy in particular. But we also know that “the market is the best analyst in the world” and it is your and our reliable partner in the momentum strategy.

Contact us now and arrange your personal investment consultation with our experts. We will take the time to see together whether the momentum strategy is the best choice for you.