Is it a “stock market” or a “market of stocks”? And does it matter? Through the years the capital markets have exhibited eras defined by various behaviors and characteristics. These can be both interesting and, more importantly, helpful in deciphering where opportunities may lie. This old question of a “stock market” or “market of stocks” provides interesting context for today’s equity markets.
It’s been talked about. Investors had thought it would happen in prior months. And now it looks to have arrived. The much anticipated return of Value stocks, as they appear to finally be taking on market leadership. Not to get ahead of ourselves, but this chart of the ratio of US Growth stocks versus US Value stocks looks ready to break out from months of transition to a position of Value leadership.
Moving on to 2021: are there new questions? Or more of the same? Can equity markets continue the trend? Will interest rates remain historically low? Could gold share its safe-haven status with Bitcoin? (Never thought I would write that sentence!)