http://compassadvisor.com/sites/default/files/default_images/boats-inside.jpg

Compass Financial Advisors

Latest Quotes:

A Snapshot of Growth vs. Value Investing

 View from the Observation Deck  

  1. Today's blog post is an update we do on an ongoing basis. Growth stocks have significantly outperformed value stocks over the past 12 months. 
  2. Growth tends to outpace value when the earnings growth rates of companies characterized as growth-oriented accelerate faster than the pace of earnings for the broader market, such as right after the economy exits a recession. Growth stocks may already be getting a bump from the recent passage of the Tax Cuts & Jobs Act, in our opinion. 
  3. The S&P 500 Pure Growth Index outperformed its value counterpart in five of the six periods featured in the chart. Growth investing topped value investing for the 10-year, 5-year, 3-year, 1-year and year-to-date periods ended 2/28/18.
  4. The returns were as follows (Pure Growth vs. Pure Value): 15-year average annualized (13.54% vs. 13.70%); 10-year average annualized (13.42% vs. 11.32%); 5-year average annualized (17.13% vs. 14.76%); 3-year average annualized (11.31% vs. 8.68%); 1-year (27.14% vs. 11.43%) and year-to-date (6.40% vs. -0.11%). 
  5. As of 2/28/18, the largest sector weighting in the S&P 500 Pure Growth Index was Information Technology at 40.0%, while the most heavily weighted sector in the S&P 500 Pure Value Index was Financials at 28.7%, according to S&P Dow Jones Indices. 
  6. YTD through 2/28/18, the S&P 500 Information Technology Index posted a total return of 7.73%, compared to 3.51% for the S&P 500 Financials Index, according to Bloomberg.

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Pure Growth Index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest growth characteristics based on three factors: sales growth, the ratio of earnings change to price, and momentum. It includes only those components of the parent index that exhibit strong growth characteristics, and weights them by growth score. Constituents are drawn from the S&P 500 Index. The S&P 500 Pure Value Index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics based on three factors: the ratios of book value, earnings, and sales to price. It includes only those components of the parent index that exhibit strong value characteristics, and weights them by value score. Constituents are drawn from the S&P 500 Index. The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks (currently 505) used to measure large-cap U.S. stock market performance.

Download a PDF of this post, please click here.

Indices

: [ ( ) ]
: [ ( ) ]
: [ ( ) ]
: [ ( ) ]
: [ ( ) ]

Latest Market News

 Stocks fell for the week as investors grappled with higher bond yields, political risks around the globe, trade tensions and higher energy prices. The real estate and utilities sectors, which tend to be bond proxies due to their high dividend yields, lost over 2% for the week. By contrast, the materials and energy sectors posted the biggest gains as investors are starting to price in higher inflation expectations. In economic news, retail sales rose 0.3% in April, in-line with forecasts, as higher paychecks from tax-cuts offset rising fuel costs. In stock news, both Walmart Inc.

 Treasury prices dropped moderately over the course of the week on strong economic data and speculation that both the Federal Reserve and European Central Bank may raise interest rates more quickly than previously expected. On Tuesday, April Advance Retail Sales were solid while March sales figures were revised to 0.8%, and May Empire Manufacturing was higher than expected, causing a risk-on environment which led to a significant drop in Treasury prices. It was also reported on Tuesday that the U.S.

 View from the Observation Deck  

Securities offered through Harbour Investments, Inc.,
member FINRA/SIPC. http://www.finra.org/
http://www.sipc.org/about-sipc

Investment Advisory Services offered through
Compass Financial Advisors, LLC,
a registered Advisor. 
Compass Financial Advisors, LLC &
Harbour Investments, Inc.
are separate entities.

Check the background of this firm
on FINRA's Broker Check