If you’ve been following me or the blog or my media appearances for awhile, you’ll note that we’ve been heavily involved with value and dividend-oriented stocks and sectors since early 2011 – way before the current mania came into being.
And now that the Muppets are being pitched “low-vol” strategies and Coca-Cola shares as though it’s some kind of fixed income, we’re getting less and less interested in the space, trimming here and there into the frenzy.
I can’t comment about the specific things we’re starting to add at the moment, but my comments for a new article at Index Universe are below:
“This year, there’s something new happening, where nongrowth stocks are being pushed up toward growth multiples because of their ability to substitute for expensive bonds and return lots of cash,” Joshua Brown, VP of investments for Fusion Analytics and an avid blogger, told IndexUniverse. “We are all aware of the long-term outperformance of lower-beta names, and we know that it works because people tend to overpay for growth and are inevitably disappointed as growth premiums fade.”
“We’ve been overweight defensive, value stocks for two years,” Fusion Analytics’ Brown said. “We are now far more interested in the cyclicals, which are hated—there’s not even a pure-play chemical sector ETF yet.”
“Once the market gets bored of paying 20 times earnings for candy companies and utilities, we’ll be waiting for the rotation,” he added.
I’m a New York City-based financial advisor at Ritholtz Wealth Management LLC. I help people invest and manage portfolios for them. For disclosure information please see here.
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