Given the market’s current volatility, one of the best investing strategies could be betting on momentum stocks because their momentum might continue for some time. Toyota (TM), McDonald (MCD), and Lowe (LOW) have managed to generate significant returns over the past few months, and we think are headed for more gains in the coming months. So, it could be wise to bet on them now to dodge current market volatility. Read on.Even though the U.S. economy is recovering from the COVID-19 pandemic-driven recession thanks to an extensive vaccination drive and government support policies, the financial market is far from stable. The fear of rising inflation has been motivating investors to rotate away from expensive stocks, which has been spurring market volatility.
Amid this situation, investors are turning to momentum investing in the hope that stocks that have managed to gain and sustain their momentum over the past few months might be able to maintain that momentum at least in the near-term. The performance of momentum stocks has not been unimpressive over the past few quarters. The iShares MSCI USA Momentum Factor ETF (MTUM) and Invesco DWA Momentum ETF (PDP) gained 11% and 10.8%, respectively, over the past nine months.
Toyota Motor Corporation (NYSE:TM), McDonald's Corporation (NYSE:MCD) and Lowe's Companies, Inc. (NYSE:LOW) have generated decent momentum over the past few months and should continue advancing in the coming months. So, we think it could be wise to scoop up these stocks now.