Brighter days are ahead for U.S. value stocks.
This might seem a relatively safe prediction. After all, shares in U.S. companies with relatively low valuations and high dividend yields have outperformed their growth counterparts so far this year.1 And as our recent research shows, the coming reversal of fortunes would restore the decades-long performance edge that academic researchers have ascribed to value stocks.
Investors, younger ones especially, may be skeptical. Powered by a relentless rise in technology share prices, growth stocks have handily outpaced value—the province of financial, utility, energy, and basic materials companies, among others—since the 2008 global financial crisis.