Value stocks have underperformed growth “in all but one year,” but saw a shift last week. This according to a recent article in The Wall Street Journal.
On Monday, September 9th, the article reports that value stocks “had one of their best days relative to growth shares since the financial crisis,” with the trend continuing into Tuesday the 10th. The article suggests that one possible factor is the rebound in Treasury yields, “as investors sold shares of higher growth technology companies in favor of buying beaten-down energy and financial stocks.”
But the article notes that this isn’t the first time investors have been sparked by signs of life in the value arena, citing how growth has dominated for the past decade as interest rates have hit all-time lows and investor dollars have gravitated toward tech stocks.
The steady increase in valuations across the board over the past decade “means value stocks aren’t cheap on a price/earnings basis,” the article concludes, “though their growth peers have climbed even higher and are viewed as more expensive.”