Growth Cycle – Near Historical Peak
Has the growth vs value disparity reached a turning point?
The recent market cycle, favoring growth, is nearing two standard deviations, a potential sign of a shift in investor sentiments.
For almost 30 years, value investing has on average outperformed growth, but the market environment following the financial crisis in 2009 has been more amenable to the latter.
For small-cap stocks, we believe that recent trends indicate a slow movement in favor of value after reaching the two standard deviation mark.
POTENTIAL MEAN REVERSION MAY SUGGEST IMPROVING LANDSCAPE FOR VALUE INVESTORS.
Source: Morningstar Direct. Date range: 1.1.1980 – 7.31.2017
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