Larry Swedroe: Value Premium Still Exists

In a recent article in, BAM Alliance’s director of research shares insights on the state of the value premium in today’s market. Swedroe explains that “even though the value premium has been quite large and persistent over the long term, it’s been highly volatile” (citing data from Dimensional Fund Advisors). He adds, however, that a long period of value underperformance “should not cause investors to abandon a well-developed plan” or question whether the value… Read More

Is Value Investing Dead?

Reporting on a Goldman Sachs study published a few months ago, a recent article from the Wharton School addresses the underperformance of value compared to growth strategies. The Sachs report, it says, claims that “value investors are seeing the longest dry spell since the Great Depression, and future returns will likely be lower than the historical average.” But the firm also acknowledges that assessing whether value strategies are in trouble depends on how one views… Read More

Value Investors Must Accept Stretches of Underperformance

Even though value investors have seen lackluster performance over the past ten years, panelists at a last month’s Morningstar Investment Conference argue this isn’t an indication that this approach is “dead.” This according to an article in Financial Advisor. AQR’s Ronen Israel commented that a value strategy is good over the long term, but an investor will have to accept periods of underperformance. “Ten years,” he said, “isn’t enough time to judge it.” Jared Watts,… Read More

Is the Value Premium Disappearing?

Nir Kaissar, founder of  Unison Advisors and columnist for Bloomberg Gadfly, asks the question — does the “value premium” still exist today given the bout of value stock underperformance vs. growth stocks. As Kaissar points out, by the mid-90s, research had emerged, driven by studies from the likes of Eugene Fama and Ken French, that value stocks trumped growth by a wide margin over the long term. The data was compelling, showing that “the cheapest… Read More