THE ROAR I NG 2020s
the start of an extended period in which value stocks, after many years in the wilderness, outperformed growth stocks. From that day until the market peak on October 11, 2007, the iShares S&P 500 Value Fund (IVE) outperformed the iShares S&P 500 Growth Fund (IVW) by more than 50 percentage points, as you can see in the top chart...
2019... despite numerous headwinds such as a slowing economy and the ongoing trade war. It feels to me like we're close to another inflection point, where value is set to outperform growth for many years. Thus, I suggest overweighting stocks like Berkshire (BRK-B), tobacco giant Altria (MO), and financial-services company Goldman Sachs (GS) in your portfolio.
It was a glorious time to be a value investor. Then, pretty much all stocks got killed over the next 17 months until the market bottomed on March 9, 2009. And in the six years after, both value and growth stocks did equally well – moving roughly in lockstep. Since 2015, however, value stocks have gained only half what growth stocks have... As you can see, these cycles tend to last six to seven years. The current one is now approaching five years. Led by the tech sector, the market has had a huge year in
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IVE vs. IVW 3/10/00 - 10/11/07
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IVE vs. IVW 12/31/14 - 11/29/19
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American Consequences
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