118.73 -0.20 (-0.17%)
After hours: 4:51PM EST
|Bid||118.60 x 800|
|Ask||119.33 x 1100|
|Day's Range||118.64 - 119.75|
|52 Week Range||91.62 - 119.75|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||22.60%|
|Beta (5Y Monthly)||0.95|
|Expense Ratio (net)||0.04%|
Amid the tug of war between bulls and bears, we have highlighted some investing ideas that could prove to be extremely beneficial for investors this holiday season.
Value stocks have been flashing warning signs for the past two months. Turns out it was just a false alarm.Source: Shutterstock If you've ever sat through a 401k benefits meeting at work or met with a financial advisor, you've likely heard of growth and value stocks. Benefits managers and financial advisors love to talk about the benefits of diversifying between value and growth stocks.They're not wrong. Diversifying between these two stock styles will give you a stronger, more balanced portfolio.InvestorPlace - Stock Market News, Stock Advice & Trading TipsGrowth stocks tend to outperform value stocks when the stock market starts to rebound. This happens because traders tend to sell -- and take profits on -- the conservative value stocks in their portfolio as they become more confident. They then take that money and put it into flashier, more aggressive growth stocks.Value stocks, on the other hand, tend to outperform growth stocks when the stock market pulls back. This happens because traders tend to sell -- and take profits on -- the aggressive growth stocks in their portfolio as they become more nervous. They then take that money and put it into cheaper, more conservative value stocks.Having both in your portfolio can help you balance out your returns. Watching for Growth Versus Value Warning SignsInterestingly, because these two stock styles tend to underperform and outperform in different market environments, we can also watch them for warnings about where the stock market is headed.By comparing growth and value stocks, we can see whether Wall Street is expecting the stock market to rise or is preparing for a potential pullback. * 7 Marijuana Penny Stocks That Have Ridiculous Possibilities When growth stocks are in favor, we can be increasingly confident that traders believe the stock market is likely to do well. When value stocks are in favor, we can be increasingly confident that traders believe the stock market is likely to do poorly.You can easily compare the performance of these two stock styles by creating a relative-strength chart comparing two exchange-traded funds. In this case, the Vanguard Growth Index Fund ETF (NYSEARCA:VUG) is the first ETF in the pairing and the Vanguard Value Index Fund ETF (NYSEARCA:VTV) is the second.When the VUG/VTV relative-strength chart is moving higher, it tells you that VUG is outperforming VTV. This means the S&P 500 is likely doing well. Conversely, when the VUG/VTV relative-strength chart is moving lower, it tells you that VUG is underperforming VTV and the S&P 500 is likely feeling some bearish pressure.The comparison of the VUG/VTV relative-strength chart and the S&P 500 (SPX) chart in the figure below shows how the VUG/VTV chart tends to diverge from the S&P 500 chart before major trend changes. VUG/VTV Compared to the S&P 500Source: TradingViewThe VUG/VTV relative-strength chart started trending lower in mid-2018 before the S&P 500 topped out in September. In late 2018, before the S&P 500 bottomed out the day after Christmas, the VUG/VTV relative-strength chart was trending higher.Recently, the VUG/VTV relative-strength chart has been trending lower while the SPX has been breaking to new all-time highs.This divergence was a warning sign that traders may be losing confidence in the current bullish rally.Luckily for the bulls on Wall Street, that warning sign turned out to be a false alarm.If you look at the closer view of the VUG/VTV relative-strength chart in the figure below, you will see that the chart just completed a bullish "wedge" continuation pattern by breaking up through the down-trending resistance level that started forming in late August. VUG/VTV Daily Relative-Strength ChartSource: TradingViewThis chart tells us that growth stocks are taking the lead once again and are starting to outperform value stocks.Seeing this gives us confidence the bullish trend in stocks is likely to continue well into the holiday season. The Bottom Line on Growth StocksYou've got to take what the market is giving you. This market continues to give us bullish gains, so we're going to keep selling put writes.John Jagerson & Wade Hansen are just two guys with a passion for helping investors gain confidence -- and make bigger profits with options. In just 15 months, John & Wade achieved an amazing feat: 100 straight winners --making money on every single trade. If that sounds like a good strategy, go here to find out how they did it. John & Wade do not own the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Marijuana Penny Stocks That Have Ridiculous Possibilities * 7 High-Yield ETFs to Buy Now * 4 Dow Jones Industrial Average Stocks to Sell The post Ignore the False Alarm: Growth Stocks Are Leading the Way appeared first on InvestorPlace.
Smart beta is gaining more traction in the capital markets and in order for that to continue, it will have to be a two-punch combination of lower fees and education that will drive more awareness moving forward. “There are probably several drivers behind increased adoption, but I think the elephant in the room is lower fees,” said Bernie Nelson, chief research advisor at Style Analytics, in Pensions & Investments. Fees, alone, don’t represent the sole driver for smart beta adoption.
Exchange traded fund investors are showing a greater interest in the value style as an extended bull market sends investors looking for better-priced segments of the market.
There is a good chance that the rotation from growth stocks to value stocks will be here to stay, analysts and investors told MarketWatch, but they also advised that the value/growth paradigm could be the wrong lens through which to view the current market rotation.
Exchange traded fund investors are showing a greater interest in the value style as an extended bull market sends investors looking for better-priced segments of the market. Over $3 billion was funneled into ETFs that track undervalued companies over October, the most this year, Bloomberg reports. The Vanguard Value ETF (VTV) was the most popular value-oriented ETF play.
We have highlighted some investing ideas that could prove to be extremely beneficial for investors in the fourth quarter in the current market environment.
The rebound in September pushed many investors to shift into underperforming areas of the market, including exchange traded funds with a value tilt. According to FactSet data, assets under management for one of the biggest value-focused exchange-traded funds tracked hit a record $50.3 billion in September, the Wall Street Journal reports. Value stocks, or companies whose shares trade at a low multiple to their book value or net worth, experienced the largest divergence in performance from growth-focused stocks this decade, according to a Bank of America Merrill Lynch study that tracked the first half of September.
The extended bull run saw growth and momentum-focused equities build a large lead on value-oriented equities, but that’s starting to change and more upside could be ahead for value-focused ETFs. QMA, a quantitative equity and multi-asset manager that is part of Prudential Financial’s investment management business, is expecting cheap equities relative to their value to outperform more expensive equities. “It looks like we’re going through a bubble every bit as big as the tech bubble was, every bit as big as in the global financial crisis, but it’s happening much more under the radar,” said Andrew Dyson, chairman, and CEO of QMA.