Momentum Strategies

Abstract
As time went by, the or so popular investing instruments atomic number 18 stock and bond（ex. Corporate bond、 Government exchequer Bond、 Treasury bills）. Besides that, those instruments are more acquainted(predicate) by most investors. Because of these reasons, there are many kinds of investment strategies that be invented in the stock market. For example, contrarian strategies and momentum strategies are the most familiar strategies that we know. DeBondt and Thaler(1985,1987) proposed that stock prices also overreact to information and suggesting that contrarian strategies to strive abnormal harvest. That means defile losers and deal winners. Jegadeesh and Titman(1993) provided momentum strategies to reach out abnormal return in the stock market. They used 16 different methods of momentum strategies to test if these methods could get abnormal return. They buy stocks with juicy returns over the previous 3 to 12 months and sell stocks with poor returns over the same period. We could find that the investors could get laid-back returns in the next 3 to 6 months if the stocks were choose with high returns over the previous 3 to 6 months. In contrast, if the instruction execution of stocks were poor in the past, these stocks may more worse in the future.



Besides that, the result of Titmans paper shows that the return of short-selling is much lower than the return of buy strategies. In most cases, the return of short-selling is negative for investors. In addition, Balvers(2001) used the same method that Jegadeesh(1993) has eer used to analysis, and the difference is the sample period. However, the results are similar to Jegadeeshs conclusions. Whether momentum strategies are useful in short-selling stocks, we would like to cover these issues in this paper.
What kinds of relationship between contrarian strategies and momentum strategies? Kaul and Nimalendran(1990), Jegadeesh and Titman(1995) tried to justify the reversion of stock market through bid-ask spread, but the...If you indirect request to get a full essay, order it on our website: Orderessay



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