Q: I have a question about investment returns and expectations. If I understand correctly, as a momentum investor you expect "above-average' returns, which I will define as 10 -12% annually (is that correct?), based on the current upward movement and interest in a stock. Eventually, the momentum slows down and the stock either drops or goes into a holding pattern as in the case of AVO, BAD, BDI,
AMA etc. Sometimes, when answering questions about these stocks, you say that the market has lost interest or momentum has slowed but that you still expect growth.
Now to my question. When you comment that the stock in question is now more of a "long term hold", like BAD, what should an investor's expectations be for the return on that stock? Should we still anticipate 10% - 12% or should we now expect that stock to return maybe 6% - 8% averaged over that period? If so, this would make it more like the return of a blue chip, only with more risk.
I realize that you will not want to be seen as predicting actual returns but I am trying to understand what I should expect from stocks so that I have a realistic approach to investing.
Thanks so much and stay warm on the ride!
Paul F.
AMA etc. Sometimes, when answering questions about these stocks, you say that the market has lost interest or momentum has slowed but that you still expect growth.
Now to my question. When you comment that the stock in question is now more of a "long term hold", like BAD, what should an investor's expectations be for the return on that stock? Should we still anticipate 10% - 12% or should we now expect that stock to return maybe 6% - 8% averaged over that period? If so, this would make it more like the return of a blue chip, only with more risk.
I realize that you will not want to be seen as predicting actual returns but I am trying to understand what I should expect from stocks so that I have a realistic approach to investing.
Thanks so much and stay warm on the ride!
Paul F.
