momentum model of asset price changes

The momentum model of asset price changes suggests that the price of an asset today is related to some lagged price of the asset (for example, the price of the asset a month ago). This is based on the notion that markets tend to be trend-driven, meaning that when the price of an asset has increased in the past, it is likely to continue to increase in the future. On the other hand, when the price of an asset has decreased in the past, it is likely to continue to decrease in the future. The momentum model suggests that investors should buy an asset when its price has gone up in the past, and sell an asset when its price has gone down in the past.