A value stock comeback, maybe

hl.co.uk:

We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Newsroom

Newsroom articles are published by leading news agencies. Hargreaves Lansdown is not responsible for an article's content and its accuracy. We may not share the views of the author.

HL Podcast

HL Insight

The Magnificent Seven tech stocks rallied yesterday, taking the rest of the market with them, a pattern we find acutely boring at this point.

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

09 Jan 2024

People, like me, who are drawn towards value stocks — stocks that are inexpensive relative to fundamentals such as profit or book value — have had a rough 15 years or so. Since the great financial crisis ended, value stocks have underperformed growth for all but a few transitory periods (the year 2022 being the longest of them). So anytime value shows strength, we get excited.

And value stocks did well during the Santa Claus rally. They didn’t outperform, exactly, but they kept pace with growth stocks during an exuberant moment in which tech and speculative assets, from Nvidia to bitcoin, rose sharply. This is surprising. The rally was, by common consent, about the realisation that interest rates were set to fall. And it is a cliché, even if not a perfectly accurate one, that growth outperforms value when rates are falling.

Was this just a blip? Or can value win again in ‘24?

Patrick Palfrey of