In recent years, growth investing has trumped value with names like Amazon, Alphabet, Facebook and Netflix leading the way. This year for the first quarter that has changed as investors rush into defensive stocks as the volatility of the market shakes confidence in the high flyers.
It has been nine years that growth has lead value investing so it has been obvious that growth has been the better strategy. However, over the last 20 years value has been the out performer. In the years between 2002 and 2006, while the FED was raising interest rates value stocks had its longest period of outperforming growth. Now we see the FED consistently increasing interest rates again.
It is too early to tell if the pattern has switched to value, but it is likely, as the environment will favor defensive names and undervalued investments.