Some have called for a shift to value stocks from growth as the economy begins to recover, bond yields rise, and inflation is let loose.
That's been a good period for growth — the stocks with high earnings growth have outperformed their cheaper value counterparts since about 2007.In addition to rising bond yields and the Federal Reserve's expressed interest in letting inflation run free, there is the problem of valuation. Large-cap growth stocks like Apple, Amazon, Microsoft, and Facebook have seen dramatic surges in valuation since March.
Morningstar Chief US Market Strategist Dave Sekera, for example, told Business Insider earlier this month that while growth stocks wouldn't completely suffer,"We'd certainly see headwinds for any further price appreciation over the next two to three years on those stocks," Sekera said. "So that's why we're looking at the value space as being the most attractive space for long-term investors today as opposed to growth.