Like indexing with the onset of exchange-traded funds, it takes a while for research to work its way into the investment marketplace. Public awareness can grow with more information available and momentum investing becoming more accepted.
However, there might be other reasons why momentum investing and other trend-following strategies are not popular. It is psychologically more difficult to buy what has gone up in price than to buy what appears to be cheap. Momentum investing may also seem too simple and more complex approaches are believed to have more merit.
Lastly, more conservative investment advisors may still resist any tactical approach. They prefer to invest with the crowd doing what everyone else does. Momentum investing, like all strategies, will have periods of underperformance. You have a better chance of keeping your job (and your clients) if you do what everyone else does. But you are likely to lose clients or your job if you lose money at times when others don’t.
