One of the value investor’s greatest tools is patience. Value investing by its very nature is a marathon, not a spirit and this has become increasingly apparent in today’s market.
QE and near six-year bull market are two factors that have held value strategies back over the past two, or three years. Following the financial crisis, value immediately outperformed, due to its contrarian nature, but since the market recovery began, returns have deteriorated.
Value underperforms
Take the Vanguard S&P 500 Value ETF (VOOV) for example. The fund is designed to track the S&P 500 Value Index, an index of companies that meet a certain set of value criteria in the S&P 500. Over a five-year period, since the beginning of March...
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