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Momentum vs Valuation: Making Sense of Markets

Momentum vs Valuation: Making Sense of Markets

Momentum vs Valuation: Making Sense of Markets

Price momentum is the concept that stocks that have moved higher in the recent past will continue to move higher in the future. It is one of the most common drivers of investment returns.

In 2015, the argument over price momentum versus traditional methods of stock valuation took shape with the financial media’s fascination with FANG stocks – Facebook, Amazon, Netflix, and Google (now Alphabet).

These stocks continued to rise, with little regard for market conditions, and in the case of Netflix and Amazon, with little regard for traditional valuation metrics like price/earnings.

When it works, momentum tends to continue for long stretches of time. However, when it breaks down, the sell-off can be quick and dramatic, sometimes catching investors unaware.

This webinar focuses on how price momentum has worked for and against stocks over the past several quarters, using the Azzad Ethical Fund (NASDAQ: ADJEX) as a case study.

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The views expressed are those of Azzad Asset Management. These views are subject to change at any time in response to changing circumstances in the markets and are not intended to predict or guarantee the future performance of any individual security or the markets generally, nor are they intended to predict the future performance of any Azzad account, strategy or fund.

Diversification, asset allocation and rebalancing cannot assure or guarantee better performance and cannot eliminate the risk of investment losses.

The information provided is for general information purposes only and should not be considered an individualized recommendation or advice. Azzad Asset Management makes no representations or warranties with respect to the accuracy or completeness of the information provided. Any illustrations are for hypothetical purposes only. Holdings are subject to change.

We strongly recommend you consult with your tax advisor for more information about your particular tax situation.

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