Are you missing Value investment opportunities?
In this video, we discuss the question: Will Value stocks outperform Growth stocks in the near future? History shows that there are long periods where Value stock returns are significantly higher.
Value companies are equities priced below their intrinsic worth compared to key financial data like dividends, earnings, or sales. Growth stocks have higher price to earnings ratios compared to Value investments. Growth stocks have expected value with potential for future above-average growth in terms of profits, sales, or market share. Many times, analysts forecast Growth stock earnings one year in advance with expectation that the companies’ earnings will catch up with their higher market prices in the next year.
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Summary
Scott Wait presents a comparison between Value and Growth equity investments, explaining their key characteristics and historical performance patterns. He reviews data from 1928 through 2022 showing that value has outperformed growth over the long term, though growth dominated in the 2011–2020 period. Mr. Wait advises including Value stocks in a diversified portfolio, noting they are currently outperforming Growth as of Q2 2026.
Key takeaway
Value vs Growth Investment Characteristics
Value equities are priced below intrinsic worth relative to dividends, earnings, or sales, while growth equities target above‑average future profit, sales, or market share.
The S&P 500 Value Index tracks companies with low price‑to‑earnings ratios, often in turnaround phases or out of favor, whereas the S&P 500 Growth Index captures companies with higher valuations based on expected future earnings.
Historical Performance of Value vs Growth
Over the entire period from January 1928 to 2022, value outperformed growth by nearly three percentage points annually.
This long‑term edge is noted despite major market changes over almost a century.
From January 2001 to 2010, Value also outperformed Growth, even through the dot‑com crash and the 2008–2009 financial crisis.
This period was unfavorable for equities overall, but Value fared better.
From 2011 to 2020, growth dramatically outperformed value, delivering nearly double the return.
This decade saw Growth stocks surge far ahead.
Between January 2021 and September 2022, Value again outperformed Growth, coinciding with the Federal Reserve’s five interest‑rate hikes in 2022.
The shift in monetary policy favored Value stocks during that window.
Current Outlook and Diversification Recommendation
As of Q2 2026, Value is outperforming Growth, and including Value in a portfolio can reduce volatility and improve long‑term stability.
Mr. Wait recommends a balanced approach that adds Value stocks if one’s portfolio is currently underweighted in that area, emphasizing globally diversified, financial science-based, and tax‑efficient strategies.
Next Podcast and Complimentary Meeting Offer
The next podcast will cover “How to Invest When Inflation Persists,” and listeners are invited to schedule a complimentary consultation with RSW Wealth Management.
The firm’s professionals assist with building tax-efficient, diversified portfolios and estate and gift planning that also minimize tax for your family.