Time to shift ?: Deutsche Bank Expert: That is why value stocks are now worth a look again | message
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Techwerte were able to benefit from an ideal environment this year
Value stocks, on the other hand, do better during the upswing
Is the change from growth to value coming soon?
The current year poses challenges for politics, business and investors in the stock market. The markets were in rally mode until the corona pandemic hit the scene, brought the economy to a standstill and tore the stock market down. In the summer months, all signs were pointing to recovery and important stock indices approached their pre-crisis level again. In particular, stocks that profited from the so-called “stay-at-home” trend rose during this difficult time.
But right now, according to Ulrich Stephan, chief investment strategist for private and corporate customers at Deutsche Bank, value stocks are again worth a look.
Deutsche Bank expert relies on value stocks
Ulrich Stephan has repeatedly pointed out in recent months that he is increasingly investing again in value stocks. In the Deutsche Bank newsletter “Perspektiven am Morgen” of October 21, he cites the reason for this that the rating is “at an all-time low” after about ten years of underperformance. The value stocks also include some companies “with cyclical business models that typically lead the market in the young economic cycle and should do so as soon as a COVID-19 vaccine sparks more economic optimism among investors.”
The expert explains that analysts went even further and that the companies of the Russell 1000 Value are currently attested “a higher profit growth than the corporations of the corresponding index for growth stocks (” Growth “)” for the next two years. So far, this has only happened in four of the past 26 years – most recently in 2010.
are value stocks overtaking growth stocks?
Value stocks are known to outperform other, higher-valued stocks during certain periods of the economy, such as the boom after an economic crisis. So are investors returning to value investing? In any case, stock market legend Warren Buffett has been sticking to his strategy for decades.
Marco Pirondini, Head of Equities and US Portfolio Manager at Amundi, recommends that investors switch to US value stocks in the current situation. Although the environment for growth stocks has recently been ideal, it is considered “unlikely that this ideal environment will last,” says “Institutional Money” the experts. He cites inflation as the reason, which has played virtually no role in recent years, but which could flare up again as a result of monetary and fiscal policy incentives. And historically, value has outperformed growth at such times.
It now remains to be seen when the hoped-for recovery, which is supposed to give value stocks a boost, will occur. Because the mood is currently clouding over due to rising corona numbers worldwide – and when a vaccine will actually come on the market is also still unclear.
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