Why Has Value Lagged?

The Brandes Institute has done some extensive research showing how, over the long haul, value stocks have beaten flahsier “glamour stocks”. Here, the firm’s managing director of investments, Ken Little, discusses why value stocks have underperformed in certain markets more recently. Little says a big factor is that, because of macroeconomic concerns, investors have been willing to pay more for stocks that are perceived to be “higher quality”, which tend to be glamour stocks. He says the difference between the prices being paid for glamour stocks and for value stocks is as big as it’s been in several decades, making for some very attractive value stock opportunities.

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