Growth Vs Value

It’ll be interesting to see how this plays out. Personally, I think both charts are iffy at best as plenty of “growth stocks” like Apple, Microsoft, and others are widely owned by value investors (we’ve owned Apple for years). This means the basic inputs behind the data is suspect. I think it does hold some value as to the general sentiment of investors but little when measuring actual results.

“Davidson” submits:

The daily SP500 Value vs. Growth ETFs show that trends have changed. The FAANG-type issues in favor prior to COVID and heavily favored thereafter with the shutdown are stalling regarding investor preferences as industrial issues gain acceptance. The chart presents ETF prices and % change from 1yr ago on a daily basis. VOOG has stalled since Sept 1. VOOV began to rise sharply on Nov 6th.

In my opinion, we are in the early stages of the shift favoring what can be called the US core economic issues. That oil prices are rapidly approaching $45/BBL is a reflection of this shift in market psychology.

Up to this point from early 2018, Growth issues have been heavily favored as hundreds of recession forecasts flooded the media 2018-2019. No recession occurred but many sectors declined on these fears. COVID-19 caused the market collapse and recession in April with investors convinced that only a select few FAANG issues were worth investment capital. Many positive 2Q20 and 3Q20 reports from core US businesses were ignored as COVID-19 issues remained the majority of media reporting. With FAANG issues stalling, Momentum Investors began to shift capital. Momentum is building in US core economic issues and it is now apparent in VOOV since Nov 6th.

(Click on image to enlarge)

This appears to be the early stages of a significant shift in investor perceptions. Equity markets are likely to rise significantly in the next few years.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.