The December issue of Kiplingers has an article about momentum investing, “Is Momentum Investing Dead?“. It says the best returns come from stocks with good 12-month growth, excluding the recent month. NoLoad FundX computes scores just the opposite, giving extra credit for the recent month. Who’s right? Or rather, why are you right?
NoLoad FundX Answer:
The one-year less one-month methodology is a popular approach for following a stock-based momentum strategy. We have tested that approach and similar ones (12 month rankings with one-month delay on trading, 11-month rankings with a one-month delay, etc.) on mutual funds and have found they do not perceptibly improve upon performance compared with the methodology we have used for 30+ years.