The use of momentum, contrarian and buy-&-hold strategies: survey evidence from fund managers

This study provides evidence from a questionnaire survey of fund managers. We find that the majority of respondents rely on momentum, contrarian and buy-&-hold strategies to some degree. Although there were few applicants who exclusively rely on a single trading strategy, clear preferences emerged. All kinds of predetermined trading strategies are preferred by younger and less experienced professionals. Moreover, contrarian traders show signs of overconfidence, disposition effect and reliance on non-fundamental information. A more conventional contrast is provided by fundamentally oriented and risk averse buy-&-hold traders, whereas momentum traders appear as the least risk averse professionals who may aim for exploiting the sub-optimal behavior of others.