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When it’s value vs. growth, history is on value’s side

Logic and history support a commitment to value stocks so investors can be positioned to take part when those shares outperform in the future.

Historically, value stocks have outperformed growth stocks in
Australia, and the outperformance in a given year has often
been striking.



  • Data covering nearly half a century backs up the notion that
    value stocks—those with lower relative prices—have higher
    expected returns.
  • Value premiums have often shown up quickly and in large
    magnitudes. For example, while the average annual value
    premium since 1977 has been 5.8%, in years when value
    outperformed growth, the average premium was over 17%.
  • There is no evidence investors can reliably predict when
    value premiums will show up. Rather, a consistent focus on
    value stocks is essential to capturing these outsize value
    premiums when they do appear.
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