BlackRock’s Kate Moore on investment decisions
BlackRock (BLK) chief equity strategist Kate Moore said in a recent CNBC interview that she prefers momentum stocks in today’s investment scenario. But she also believes that value stocks could perform well.
The US political environment is in a tough phase. Delays in the implementation of the Trump administration’s proposed reforms are becoming growing concerns for the US economy (QQQ) (SPY), and it appears that major parts of the administration’s agenda have entered danger zones in Congress.
However, markets (IWM) have shown huge momentum in the past eight months, and Kate Moore believes that momentum stocks will perform better in such a momentum-oriented market. Investments in momentum stocks indicate that investors want to participate in the market with the existing trends of the market. This is a short-term investment process, while value investing is a long-term investment process. Investors have to wait for value investments, which do not immediately provide strong returns.
The PowerShares S&P 500 Momentum (SPMO) ETF, which tracks the performance of the major momentum stocks of the S&P 500 Index, has risen nearly 16% in the past year. Berkshire Hathaway (BRK-B), J.P. Morgan (JPM), and Comcast (CMCSA) are among the top holdings of SPMO. By comparison, the S&P 500 Index has risen nearly 14.5% during the same period.
For more on this subject, you might be interested in reading Market Realist’s “Morgan Stanley: S&P 500 Index Could Touch 2,700 in the Next Year.”