The Rational Reminder Podcast · Thursday, October 1, 2026
Victor Haghani highlighted the difference between momentum investing and return chasing, noting that while momentum has a defined strategy and has historically performed well, return chasing is more gradual and detrimental. He explained that extrapolators, a type of return chaser, gradually increase equity exposure as markets rise and unload as they fall, leading to poorer performance compared to defined momentum strategies.
“What I realized is that, first of all, you know, momentum has a fully agreed upon definition. When we talk about momentum, more or less, we're all talking about the same thing.”
“It's this more gradual thing that momentum is a binary. You know, it's either you're overweight or you're underweight. It's binary. As soon as momentum flips one way or the other, you do that.”
“With return chasing, it's this more gradual thing. When we model it in this research that we've done, right, you're looking at historical returns. And the more the better historical returns are, the more you want to own of equities.”