A strategy that surpasses a certain investment approach focusing on recent price increases incorporates additional layers of analysis. For example, a model that considers both the rate of price change and underlying company fundamentals seeks a more robust assessment of potential investment opportunities.
This enhanced methodology offers advantages such as mitigating the risk of investing solely based on short-term market trends. Historically, relying exclusively on rapid price appreciation has led to speculative bubbles and subsequent market corrections. Incorporating factors like financial health and industry outlook provides a more stable and informed investment decision.