This is a Guest Post by AK of Fallible
AK has been an analyst at long/short equity investment firms, global macro funds, and corporate economics departments. He co-founded Macro Ops and is the host of Fallible.

The 3 stocks our team is looking at in June are Facebook (FB), Google (GOOGL), and Amazon (AMZN). I know… they are just the FANG stocks. It’s unoriginal, everyone is investing in them. Why should YOU jump into that played out trend? Well hear me out!

If you’ve been following Fallible and Macro Ops for a while, then you know we’ve been expecting a melt up in the markets soon. That’s what you can expect to happen in late stage bull markets. And if we look at history, it tells us that growth/momentum names outperform by A LOT in this type of market.

Everyone tends to concentrate their funds into the main winners in the market — we’re talking about the ones with the largest earnings and stock price gains. Interest in other stocks that don’t reach that highest tier fades away. These investors aren’t worried about value, they just want price appreciation.

There’s a herding effect that takes place too. The way human psychology works, every investor wants to be invested in the same thing because when they’re following a crowd, it feels as though the risk is lower. (It’s not.) But regardless, it’s emotionally satisfying to stay apart of the herd.

Another thing to remember is that momentum begets more momentum. If something has been doing well, it should continue to do well. You can see this in the chart of the momentum factor ETF (MTUM) versus the S&P (SPY) since the start of 2017. It’s been outperforming by A LOT. And as momentum goes… it should continue to outperform.

But there is still a lot of skepticism about this trend. And that’s a positive because the best trends continuously climb a wall of worry.

Make sure to watch the video above to learn more!

And as always, stay Fallible out there investors!

By Steve Burns

After a lifelong fascination with financial markets, Steve began investing in 1993 and trading his accounts in 1995. It was love at first trade. After more than 30 successful years in the markets, Steve now dedicates his time to helping traders improve their psychology and profitability. New Trader U offers an extensive blog resource with more than 4,000 original articles, online courses, and best-selling books covering various topics.