We take a look at the characteristics of growth investors and whether growth stocks are on the decline. In other capital-growth-related news, signs are pointing towards a downward trend in the tech sector but continued growth for financial stocks.
Swedroe: Value/Growth Investor Characteristics (ETF.com, July 05)
The author looks at the debate on the value premium and whether it is risk-based or behavioral-based. A study published in February 2017 titled “Who Are the Value and Growth Investors?” breaks down the demographics among value and growth investors and what this means for investors.
Investors Are Increasingly Worried About a Coming Drop in Technology Stocks (CNBC, July 5)
Despite consistently strong performance from the tech sector, there are warning signs that may be coming to an end. Rising volatility may indicate a coming sell-off. “Investors are rotating to value stocks and away from growth stocks.” Larry McDonald, the author The Bear Traps Report, warns investors may want to get out ahead of the decline.
Forget Growth Stocks, 2017’s All About Value (Nasdaq, June 06)
Growth stocks have dominated over the last decade; however, value stocks are pushing back. “Two economic scenarios await investors over the next several years – and neither is good for growth stocks.” Investors should look for companies with low price-to-earnings and solid balance sheets. “Companies with relatively lower debt burdens have the financial flexibility to weather the storm while their over-leveraged peers crumble.”
Financials and Tech Stocks Seesaw: Whose Turn Is It Now? (Barron’s, July 05)
Since the election, financial and technology stocks have been battling for market dominance. Frederick Cannon, an analyst with Keefe, Bruyette & Woods believes “financial stocks could deliver value regardless of which way tech goes, because there have been only a few periods where the sectors have been diametrically opposed.” Overall, financial stocks continue to have a positive outlook.
Jack Bogle Strikes Back! (Morningstar, July 04)
The author puts together a collection of Jack Bogle’s comments based on previous articles. They take a look back at previous predictions and Bogle’s reactions. Bogle doesn't believe that value-style investing is intrinsically superior to growth investing, calling that notion a "fad" that leads to value stocks becoming "overpriced" and thus "reverting to the mean."
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