Applying Momentum to the Nasdaq-100 Index
According to many studies, momentum has been one of the best performing factors over the long run while the Nasdaq 100 Index has been one of the best performing indexes for many years as well. In this study, combining the two together increased both absolute and risk-adjusted returns over the Nasdaq 100 Total Return Index alone.
Tesla’s Addition to S&P 500 Prompts a Review of Volatility Changes when Added to the Index
December 21st marked the first trading day with Tesla TSLA being included in the S&P 500 Index SPX, as it replaced Apartment Investment & Management Co. AIV. At a market capitalization of over $624 billion, TSLA is the largest company to ever join the S&P 500.
Active vs. Passive Management in 2020
At various points previously, we have discussed the debate regarding active vs. passive management. Proponents of passive management insist that active managers cannot consistently outperform a passive benchmark and therefore investors are better off to invest in lower cost index funds.
Sector Performance During Past Shifts From Large Cap to Small Cap Equities
Recently we discussed the “rotation trade” and examined the performance of the S&P 500 sectors during shifts from growth to value. Another facet of the rotation trade has been a shift from large cap to small. Today we wanted to examine sector performance in another facet of this rotation – a shift from large cap to small cap.
Sector Returns Following Presidential Elections
As we arrived at the beginning of November, much of the investment community had heightened concerns about the prospects for continued domestic equity growth during what was assumed to be a volatile market environment with the potential for a contested US presidential election.
A Look At Previous Momentum Crashes
Monday, November 9th, was the largest laggard outperformance we have in the Nasdaq Dorsey Wright (NDW) data with laggards outperforming leaders by more than 16%. Momentum crashes are not a new thing. All types of things drive the leaders/laggards spread on a day-to-day basis.
Strength In Small Caps
Many broad domestic equity markets moved sharply higher last Monday after investors took into account stabilization in the expected outcome of the US presidential election as well as positive coronavirus vaccine news.
“BEACH Stocks” Continue To Make Waves
Volatility swept across US markets over the last several days as fear and uncertainty surrounding the coronavirus as well as the US presidential election continue to take hold, causing the Nasdaq Composite to post its worst week since March.
Investing Like The Masters: Find Your Caddy
Like a good caddy, the tools on the Nasdaq Dorsey Wright Research Platform offer guidance, advising you toward logical club selections based on present conditions, while you remain the ultimate decision-maker.
Using Momentum to Avoid the Losers
Domestic Equities currently hold the number one spot in the Nasdaq Dorsey Wright Dynamic Asset Level Investing (DALI) tool and populate the upper echelon of the Asset Class Group Scores (ACGS) page, confirming the technical strength/leadership from that group.
What’s Holding Dow Low Volatility?
By almost any measure, 2020 has been one of the most volatile years for the market in recent memory. Through the first week of September, the S&P 500 SPX had more daily moves of +/- 2% or more this year than in any full calendar year since 2009.
First Trust Focus Five Model: A Case Study for Relative Strength Investing
On October 21st, 2020, the First Trust Focus Five Model FTRUST5 turns 11 years old. While many investors have been following this model for years, those of you who have not can read more about the model’s methodology in the First Trust Focus Five Model Fact Sheet, which includes a detailed account of the methodology, the inventory, and performance numbers that go back to inception.
Nearly Two Months Since U.S. Equity Took the Number #1 Asset Class Ranking
We are roughly two months removed from seeing US Equity make its way back to the number one ranked asset class in the Nasdaq Dorsey Wright DALI (Dynamic Asset Level Investing) tool. This is the eighth time going back to 2000 that US Equity has been the number one ranked asset class.
With Fresh Confidence Infused into the Crypto Market, Here’s What Advisors Need to Know
On October 8, Square SQ, the payments company helmed by Twitter CEO Jack Dorsey, announced that it purchased 4,709 Bitcoins, a $50 million investment, representing 1% of the firm’s total asset. As a result, Square became the second technology firm to go long on Bitcoin in recent months after MicroStrategy MSTR, a business intelligence firm, crowned the crypto as its treasury reserve asset of choice.
Identifying S&P 1500 Stocks with Long-Term Market Relative Strength
There are many benefits of using a rules-based approach using Relative Strength (RS), one of the main cornerstones of our research. Relative Strength, also known as Momentum, is a time-tested investment factor that permeates our work, allowing us to identify where both strength and weakness exists across securities, sectors, and asset classes using just one objective input - price.