Why has value investing underperformed growth investing for over twelve years and how to position your portfolio for the eventual rebound in value investing.
In this episode you will learn:
- The difference between growth and value investing and why value investing outperforms growth investing over the long-term.
- How value and growth indices are constructed and how they differ from fundamental indexing.
- What are the risks and opportunities of investing in concentrated, deep-value managers.
- Why value investing will eventually rebound.
Thanks to WIX and Sleep Number for sponsoring the episode.
For show notes and more information on this episode click here.
- [0:18] What is value investing?
- [2:07] A historical look at growth vs. value yields.
- [5:41] The return of the value stock in the early 2000s.
- [11:07] The twelve and a half years of underperforming value stocks.
- [13:09] The sectors controlling the performance of value and growth stocks.
- [15:01] Better understanding the indices.
- [20:31] Using fundamentally weighted indices to balance your portfolio.
- [23:10] Are underperforming managers struggling because of poor skills or because of unfavored strategies?
- [29:20] While value may be difficult to predict, it isn’t dead.
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