Friday, July 1, 2016

Growth vs Value inflection point

The chart line in red is the Russell Growth 1000  index as a ratio to the Russell 1000 Value Index.  This relationship shows in history that it can lag the movement of the S&P 500 as represented by the SPY, the black line.But perhaps was always correct in that the S&P has always recovered.

It is interesting that at this moment they are 1 : 1.  Growth at 1010.41 and Value at 1012.79.  Theoretically, investors are indifferent to which group of stocks is better.  Or, perhaps investors are confused.  Regardless, this could be a turning point in sentiment.

It is obvious from the chart that sentiment turned to less risk at the red peak January 2016.

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