Editing Investment (section)

=== Momentum investing ===
Momentum investors generally seek to buy stocks that are currently experiencing a short-term uptrend, and they usually sell them once this momentum starts to decrease. Stocks or [[Security (finance)|securities]] purchased for momentum investing are often characterized by demonstrating consistently high returns for the past three to twelve months.<ref>{{Cite web |title=Momentum Investing |url=https://www.thebalancemoney.com/what-is-momentum-investing-4587982 |access-date=2022-10-05 |website=The Balance |language=en}}</ref> However, in a [[Bear Market|bear market]], momentum investing also involves short-selling securities of stocks that are experiencing a downward trend, because it is believed that these stocks will continue to decrease in value. Essentially, momentum investing generally relies on the principle that a consistently up-trending stock will continue to grow, while a consistently down-trending stock will continue to fall.

Economists and financial analysts have not reached a consensus on the effectiveness of using the momentum investing strategy. Rather than evaluating a company's operational performance, momentum investors instead utilize trend lines, moving averages, and the [[Average directional movement index|Average Directional Index (ADX)]] to determine the existence and strength of trends.<ref name=":02">{{Cite web |title=Investment Strategies to Learn Before Trading |url=https://www.investopedia.com/investing/investing-strategies/ |access-date=2022-10-05 |website=Investopedia |language=en}}</ref>