Q: I tend to buy on noticeable dips. The momentum crowd often seems to do well so I am curious: are you aware of any study that compares performance between the following approaches:
Buy stocks at or close to 52-week highs, vs.
Buy stocks at or close to 52-week lows.
I have tried to do this analysis myself using commonly available “practice accounts”. My what-if scenarios however lack the rigor that you would see in an academic exercise. Also, a question related to the above: when one is reviewing stock charts available at the better sites, are dividends included in the charts that compare baskets of stocks? I have assumed they would be excluded. If my assumption is correct, does that distort performance comparisons in a significant enough manner as to nullify one’s conclusions?
Buy stocks at or close to 52-week highs, vs.
Buy stocks at or close to 52-week lows.
I have tried to do this analysis myself using commonly available “practice accounts”. My what-if scenarios however lack the rigor that you would see in an academic exercise. Also, a question related to the above: when one is reviewing stock charts available at the better sites, are dividends included in the charts that compare baskets of stocks? I have assumed they would be excluded. If my assumption is correct, does that distort performance comparisons in a significant enough manner as to nullify one’s conclusions?