Bargain Bin Bottoms Out 📭

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Bargain Bin Bottoms Out

Value investing. The art and science of bargain-hunting on the stock market. With big picture forces causing the deals to dry up, a war of investing ideology has broken out in the market. This could get tasty.

There are strategies aplenty for making money out there on the stock market. One of the most famous; to buy a stock for less than it’s worth. It’s an age-old strategy, pioneered by Warren Buffett, respected, and revered. But with the S&P 500 topping all-time highs, finding the deals isn’t easy.

Head of European Quantitative Strategy at AB Bernstein, Inigo Fraser-Jenkins, believes value investing may have met its end. The killer? Quantitative easing (QE). “The outperformance of value might require higher interest rates, which could be structurally difficult to achieve.” QE keeps rates low, helping to lift stocks out of the “value zone.” For some investors, a change to the economic landscape can’t come soon enough. Others see this talk as just par for the course in “booming” times, and others still, are fighting back with their own.

After all, value investing has changed. Figuring out what a stock is worth so that you can buy it for less, requires that investors put in a lot more hustle than they used to. Gathering insights to get a better valuation than your rival is now the name of the game, a proper sport of ‘who can see further into the future than the other?’. Call it quits on the value investing way in this market, or take up the challenge?

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