I’ve talked about this before, but it looks like markets are having another Miller Lite moment.
Think back to those iconic commercials of the 1980s.
Rival chants of “tastes great!” and “less filling!” would erupt into bench-clearing brawls involving stadiums of people.
It was ridiculous … but thinking about it 30 years later still makes me laugh.
And you could easily replace those two camps with value investors and growth investors today.
Well, just as it’s possible for a beer to taste great and be less filling, both value investing and growth investing can be wildly successful over time. My research confirms it.
It’s why growth and value represent two of the six major factors I incorporate into my Green Zone Ratings model. And in an ideal world, I like to buy stocks that rate well on both growth and value … along with my other four factors (momentum, quality, volatility and size.)
Of course, market leadership changes over time. There will be stretches when growth stocks outperform value — the latest bull market that started in 2008 is an example. Value will take the reigns at times as well — look at the period between 2000 to 2008.
The question for us today is: Which one of these two factors will dominate in the here and now?
Growth Stocks vs. Value Stocks: The Pendulum Swings Again
Since the launch of my premium stock research service, Green Zone Fortunes, I have focused most heavily on growth and momentum stocks. It’s where the dominant trend has been for years.
But growth stocks hit a major speed bump earlier this year. The S&P 500 dropped more than 10%, falling officially into correction. And the growth-heavy Nasdaq got slammed a lot harder, dropping over 20% and falling into bear market territory.
No worries. The beauty of Green Zone Fortunes is the adaptability of my model.
In February, I saw a fantastic opportunity in value stocks. And in a little over a month, we’re already up over 10% in a gritty, old-economy steel stock. (I expect a lot more gains to come, by the way.)
I still see a lot more upside in value stocks.
But today, it seems that the pendulum of market leadership is shifting back to growth again.
Consider the recent performance of the Vanguard S&P 500 Growth ETF (NYSE: VOOG) and the Vanguard S&P 500 Value ETF (NYSE: VOOV).
The value ETF bottomed out on March 8 and is up about 5% since then. But over the same period, the growth ETF is up about 11%.
It’s still early, of course. But it’s looking like growth stocks are back in the driver’s seat.
You know me. I don’t get tribal in my investing. It’s not critically important to my identity whether growth or value “wins.” I’m a trend follower and I invest where the data takes me.
And my Green Zone Fortunes subscribers are following the growth trend now in a variety of sectors.
Just looking at renewables, four tickers associated with my latest “Infinite Energy” presentation are all up since we added them to the model portfolio earlier this month.
To find out more about why I’m targeting the growth of the renewables energy trend, click here to watch my presentation now.
And stay tuned. I’ve found the No. 1 stock in the fastest-growing sector of the 21st century’s biggest new industry — artificial intelligence. I’ll have more information on that front next week.
To good profits,
Chief Investment Strategist