3/17/2024 0 Comments Evisceration the visitor returns![]() ![]() Because they are more reliable, growth stocks usually trade at higher price-earnings multiples than the rest of the market. Growth stocks can lag for periods of as long as seven years then the cycle shifts and it's growth's turn again. "The rally since March has been a risk rally," is the way that Grant Bowers, portfolio manager of Franklin Growth Opportunities fund (FGRAX) summed up the discrepancy in an interview at his office this week.ĭiverging performance between quality growth stocks and other parts of the stock market is all part of a fairly standard cycle. The big gains were racked up by the seedier elements - i.e., those deemed by S&P to have less stable and sustainable earnings. As you can see from the chart below, stocks that got high quality ratings from Standard and Poor's have barely participated in the summer rally. Morgan Stanley analysts Gerard Minack and Jason Todd wrote about it last month. Grantham isn't the only one to note the bargain pricing of high-quality growth stocks compared to the rest of the market. ![]()
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