Unfortunately, when it comes to investing, recent, short-term performance doesn’t tell us much about what to expect in the years to come. For example, Vanguard highlighted that “Performance ratings for goods and services as diverse as education, automobile purchases, fine dining, and health care can share similar predictability and, therefore, reliability: An institution, product, or service that is highly rated one year will likely be highly rated the next year, and a below-average-rated institution, product, or service one year will likely be similarly rated the next.” After all, we know intuitively that in many other facets of our day-to-day lives past performance is strongly associated with future performance. It’s quite understandable that one could look at this chart, observe that value stocks have trailed the broad market over the prior three, five and 10 years, and reasonably conclude that something is “broken with value” or simply that value is an inferior strategy. small-cap value stocks as of June 30, 2019, illustrates value’s tough run quite succinctly. The chart below, which presents the annualized performance of U.S. If you don’t stop and look around once in a while, you could miss it.” I thought of this nugget recently when pondering the recent run of extended underperformance of value stocks-of both the large-cap and small-cap variety-relative to broader market indexes, something which we’ve covered on multiple occasions in the past on these pages. The renowned dispenser-of-wisdom, Ferris Bueller once said “Life moves pretty fast.
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