This is an excerpt from Growth vs. Value Stocks: Signs of Leadership Change on ETFguide TV with Lance McGray at Advisors Asset Management. This episode examines:
Ron: We’re pleased to have with us Lance McGray,
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Over the past several years there’s been a lot of derogatory talk against traditional market cap weighted indexes.
And one of the oft-repeated arguments against traditional indexing that you’re guaranteed to read about or see is something like, “Market cap weighted indexes overweight overvalued large-cap stocks and underweight undervalued smaller-cap stocks.”
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“Stocks are cheap by historical standards” is the latest fiction being promoted by valuation geeks. Is it true?
Meb Faber, proprietor of the Cambria Global Value ETF (NYSEARCA:GVAL), and a valuation guru tweeted the 5-year CAPE ratio for the usually frothy technology sector (NYSEARCA:XLK) is just 22 today compared to an elevated 96 at the height of the dotcom boom back in March 2000.
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Former high flying industry sectors like biotech (NASDAQGIDS:IBB) and social media stocks (NYSEARCA:SOCL) have crashed between 14-16% over the past month. Have hot momentum stocks lost their mojo?
One proxy of momentum stocks is the iShares MSCI USA Momentum Index ETF (NYSEARCA:MTUM).
The fund owns 100-150 large and mid-cap U.S.
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Is another surge in stock market fear and volatility ahead? Will you be ready when it happens?
“Public psychology is the most important single factor in shaping security markets,” said Gerald Loeb.
Loeb was right and that’s why we make it a regular habit at ETFguide to track movements and trading opportunities in the CBOE S&P 500 Volatility Index (ChicagoOptions:^VIX).
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