Momentum investing works. We’ve known this about US equities for 20 years, but it is also true in international markets, commodities and foreign exchange. And it’s true in the UK, too. My model momentum portfolio has risen by an average of 9.7 per cent a year in the past 15 years, compared with a gain of only 1.7 per cent a year in the FTSE 350.
But, of course, no strategy works all the time. My momentum portfolio has suffered periods of underperformance, such as in 2012, 2019 and in recent months.