just like that Growth stocks are back in fashion. The Vanguard Growth ETF (NYSE:) outperforms the Vanguard Value ETF (NYSE:). 90% The past three weeks point. The gap in favor of “risk-on”, which mostly means technology stocks, is the widest since these two exchange-traded funds were founded nearly 19 years ago.
what to give Wasn’t every strategist proclaiming a new era of value investing? It still seems like it from what you’ve heard on financial television and read in investment magazines. I think the rebound in growth is likely to be short-lived, likely due to Tesla’s (NASDAQ:) stock gaining 75% since the beginning of the year.
Remember the bear market of the early 2000s? Longtime investors may recall those difficult times. It was not only its duration but also its depth that made the recession so severe. Although it peaked in March 2000, it hit market lows until October 2002, with a total decline of 78% for him. During the last 31 months, there have been several “bear market upswings.” In fact, short-term snapbacks of 25% or more were common.
This month’s revenge on the tech giant is no big surprise. Many investment managers entered 2023 with an underweight on once-attractive stocks such as Apple (NASDAQ:), Amazon (NASDAQ:) and Tesla (NASDAQ:). In 2022, his 62% of active funds hit his highest level since 2005, according to data from Strategas Research.
Will 2023 be the year growth stocks re-establish a foothold? Was 2022 an exceptional year? We’ll have to wait and see. But the Nasdaq Composite is still trading at 26 times his high last year, so value stocks look cheap by contrast. That said, the successful investors so far in 2023 may be those who rebalanced their allocations late last year.
This article first appeared in The Humble Dollar.
