Rob’s Read: The Real Reason Value Has Been Lagging Growth

InstitutionalInvestor.com:

“Portfolio managers that invest in undervalued stocks have lagged funds that hold growth stocks over the past decade — leading market commentators to speculate that value investing is dead.

Not so fast, argues asset manager Dimensional Fund Advisors.

Yes, investors holding U.S. value stocks — those trading at a low price-to-book value — have produced an annualized compound return of 12.9 percent. That compares with a 16.3 percent annualized return for growth stocks, or those with a relatively high price. But Dimensional has published new research showing that it’s not the performance of value stocks that has been out of whack — rather, the performance of growth stocks has been abnormally high relative to historical levels.”

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Rob McClelland RFP, CFP, HBA
Vice President, Co-Branch Owner, Senior Financial Planning Advisor
The McClelland Financial Group of Assante Capital Management Ltd.


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