Growth vs. Value Performance

Since the bull market began on October 9th, 2002, the S&P 500 is up 84.4%, the S&P 500 Value index is up 102.8%, and the S&P 500 Growth index is up 68.2% (not total return). Since the October 9th, 2007 peak in the S&P 500, however, growth stocks have handily outperformed both the S&P 500 and the S&P 500 Value index.

As shown in the second chart below, the Growth index is down 4.93%, while the Value index is down 11.99%. If the market ends up making new highs before hitting the -20% bear market threshold (keeping the longer-term bull market intact), will the second act be led by growth instead of value?

click to enlarge

Comments

[jimfpau:]

The lack of clarity amongst the great growth stock boom leading up to the dot com bust was not so out of the ordinary, history has shown other so called stocks of unprecedented promise metting simular fates when highly speculative attitudes failed to recognise speculation alone doesn't cut it.
Trends into and out of corrections are also speculative short term, my feeling is with safety of returns for pensions at the formost of investors minds, and the not so distant memerios of October 2001 to march 2003 also taking effect, unless you are very good at picking growth stocks at reasonable prices thus allowing for safety margin (remembering the greater the enthusiasm the market has for these hot stocks, and the faster it rises in price compared with actual growth in earnings, the greater the disapointment the market shows when earnings disapoint) then I think value will take the honors.

2008 May 20 09:58 AM

[advisor tom:]

useless data

2008 May 20 10:19 AM

[Urbane Gori...:]

To me, it seems that Value just has a higher Delta than Growth. I'm not sure what kind of social life these guys have, but I sure like the stuff they come up with.

Thx jegan ;-)

2008 May 20 10:51 AM

[daniela:]

Again, these guys certainly know how to report what is going on in the market. I would like somebody to tell me horizon when value stocks like BAC, C, PFE, WFC are going to perform... Investors are looking for stocks that have some growth potential this year, not 2 years from now. Growth fund has stocks that will likely perform better this year. If you are active investor, then you probably notice that there are a lot of bets on growth stocks already. That includes mid caps and small caps. I think market is getting a little bit more sure footed and start to invest beyond large cap value stocks.

2008 May 20 03:21 PM

[advisor tom:]

what went up the most during the bull went down the most during the bear. imagine that... if you read anything more into this stuff than that you need to get your own social life.

2008 May 20 04:13 PM