The Use of Momentum, Contrarian and Buy-&-Hold Strategies: Survey Evidence from Fund Managers

Torsten Brozynski, Lukas Menkhoff () and Ulrich Schmidt

Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover from Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: This study provides evidence from a questionnaire survey of fund managers. We find that the majority of respondents rely on momentum, contrarian and buy-&-hold strategies to some degree. Although there were few applicants who exclusively rely on a single trading strategy, clear preferences emerged. All kinds of predetermined trading strategies are preferred by younger and less experienced professionals. Moreover, contrarian traders show signs of overconfidence, disposition effect and reliance on non-fundamental information. A more conventional contrast is provided by fundamentally oriented and risk averse buy-&-hold traders, whereas momentum traders appear as the least risk averse professionals who may aim for exploiting the sub-optimal behavior of others.

Keywords: momentum trading; buy-&-hold strategy; contrarian strategy; market efficiency (search for similar items in EconPapers)
JEL-codes: G23 G14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-fin, nep-fmk and nep-rmg
Date: 2003-12
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Persistent link: http://EconPapers.repec.org/RePEc:han:dpaper:dp-290

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