The equity market has been volatile due to investors’ fears of an economic slowdown driven by the resurgence of COVID-19 cases and high inflation. Amid this volatility, one of the best investing strategies could be betting on momentum stocks because they are expected to maintain their momentum and dodge the market’s fluctuations. Therefore, we think it could be wise to bet on Philip Morris (PM), ArcelorMittal (NYSE:MT), Norsk Hydro (OTC:NHYDY), and Aperam (APEMY (OTC:APEMY)), each of which possesses solid momentum attributes. Let’s discuss.The resurgence of COVID-19 cases due to the rapid spread of the virus’ highly contagious Delta variant has fueled severe stock market volatility. In addition, high inflation has been a concern for investors. The consumer price index increased 5.4% in June, and the International Monetary Fund (IMF) warned that inflation could be persistent.
The S&P 500 declined from a record high yesterday on a slowdown in job growth last month. Amid this scenario, momentum investing could help investors dodge short-term market volatility because stocks that have gained momentum will likely maintain it for some time irrespective of market conditions. Investors’ interest in momentum stocks is evident in the iShares MSCI USA Momentum Factor ETF’s (MTUM) 5.3% gains over the past three months.
Philip Morris International Inc. (NYSE:PM), ArcelorMittal (MT), Norsk Hydro ASA (NHYDY), and Aperam S.A. (APEMY) have generated decent momentum over the past few months, which they are well-positioned to maintain. In addition, each of the stocks has an A grade for Momentum and an overall Strong Buy or Buy rating in our proprietary POWR Ratings system. So, it could be wise to scoop up these stocks now.