Failure of Value Investing? BOA: Three Reasons to Buy Growth Stocks

WikiFX News (19 July) -According to the report from Bank of America(BOA) this week, the winning trend of value investing has been broken since 2007 as growth strategies have outperformed value strategies by nearly 8%.

Despite BOA listed 7 reasons why value investing may be poised for a comeback, it also laid out 3 reasons why growth strategies will continue to climb.

1. ESG prefers growth. Most ESG scoring systems favor tech-based company (growth investing) and penalize energy-based company (value investing). 2. QE Infinity and weak economy favor growth. It suggests that as long as financial conditions remain easy, its difficult to see the current trend of growth outperforming value reversing. 3. In some cases, value means melting ice cubes.

BOA explained that disruption is evident in almost every industry because new technology will replace the old business models, creating obsolescence risk for value investing.

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