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Is Style Still in Fashion?

From 2007 to 2021, ever since the 2008 Financial Crisis, Growth stocks have trounced Value stocks 11 out of the last 15 calendar years – AKA batting average of 73%. Post-Covid, Value stocks not since the Dotcom bubble hammered Growth stocks in 2022 (-29.41%), outperforming by 2,418 bps. Over the next few series of weekly commentaries, we will dive into understanding the reasoning, fundamental changes occurring to the S&P 500 index, and whether this is a blip in the Growth saga or are Value stocks becoming a trend leader. But let’s not forget, since the 2008 Financial Crisis, growth stocks have benefited from an environment of Fed policies of cheap money (Quantitative Easing, Pandemic Stimulus), federal bailouts, low inflation, low-interest rates, and last but not least, low-cost manufacturing in China all coming to a sudden halt in 2022. At Sowell, we fundamentally believe in style rotation between growth-and-value stocks in part due to its fundamental correlation to changing market environments and history repeating. But that fundamental investment philosophy also hinges on the make-up of an index, the dominant sectors leading the respective styles, and its correlation to the economy, interest rates, inflation, and market-capitalization of stocks. It is premature to state Value stocks will be the next trend leader after one data point, but all the right stars are in place.

Sign up for the Sowell Sponsored Golf Event at TPC Four Seasons Golf & Sports Club

Limited space is available. Tee time is Friday, April 22 at 2 pm. Remember to book your hotel and air travel accordingly. Sowell will cover the cost to rent resort clubs, if needed.

Download the Journey Roadmap

Download the Journey Roadmap

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Sowell Summit Event

(Please be sure to click the link on the web page to book your room)

Thank you for registering!

You should receive a confirmation email shortly. Don’t forget to reserve your room through the unique Sowell hotel reservation page. You can extend your stay at the Sowell Summit reduced room rate.