View Full Version : Investing in Large-Cap and Value Stocks in a Growth Environment
Exchange-traded funds (ETFs) such as the Vanguard Value ETF (VTV), allow investors to access multiple stocks deemed to be undervalued by the market while requiring minimal personal research.
Buying undervalued investments is called value investing, a time-honored strategy that has been employed by conservative investors for many years.
Brought to the forefront of investors awareness by well-known investor and author Benjamin Graham and his classic book Intelligent Investor, value investing uses fundamental analysis to determine when stocks are potentially undervalued by the market, making them ripe to rise when that irrationality is resolved
By contrast, growth investing aims to pick stocks that have demonstrated better-than-average gains in earnings and are expected to keep delivering high levels of profit growth. But there are no guarantees. As a result, growth stocks tend to be more volatile than their value-based counterparts.
Since 2017 has been a good year for the market and especially growth stocks so far, it is no surprise that VTV has slightly underperformed the S&P 500 in the past 12 months to gain around 10 and 7 year to date. However, value stocks likely will gain favor again at some point
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