When Will Value Investing Return to Favour?

The success of high-profile growth stocks such as Apple and Facebook has meant value investing has recently failed to deliver

Dan Lefkovitz 9 January, 2018 | 2:39PM
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History suggests that value stocks beat growth stocks over the long run. Investors are compensated for the risk of owning troubled companies with low-priced shares. While short-term investors chase trendy growth stocks whose price-tags overestimate their prospects, longer-term shareholders prefer companies that under-promise and over-deliver.

But recent market behaviour has left many investors wondering when value will come back into fashion. Of course, predicting the timing of market turning points is a fool’s game. The unexpected, powerful, and ultimately short-lived rally in value stocks after the US election demonstrates this point.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Amazon.com Inc3,376.07 USD1.68Rating
Apple Inc149.32 USD0.46Rating
Facebook Inc A315.81 USD-3.92Rating
Netflix Inc668.52 USD-0.47Rating
Starbucks Corp114.92 USD0.18Rating
The Walt Disney Co172.04 USD0.02Rating

About Author

Dan Lefkovitz

Dan Lefkovitz  is strategist for Morningstar’s Indexes group