GLOBAL INVESTOR
JEAN PIERRE VERSTER: Mind the Garp
The problem is that it has become increasingly difficult to find growth at a reasonable price
In a reversal of the past decade, the past six months have seen value stocks significantly outperform growth stocks. Using the Vanguard Value and Vanguard Growth exchange traded funds as proxies, value stocks have returned 32.5% since November 1 2020, while growth stocks have returned only 24.5% from then to May 1 2021. Over a longer period, however, growth stocks are the clear winners, returning 314.6% over the past decade, versus 132.8% for value stocks.
The problem is that it has become increasingly difficult to find growth at a reasonable price (Garp). Abundant fiscal support and unprecedented monetary stimulus have powered global markets higher, and low interest rates are keeping valuations elevated. But there are always opportunities:..
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