The big investment theme this week has been the rotation to value stocks from technology, the quintessential growth sector. What does this mean for your portfolio?
Most stocks can be classified as value or growth, depending on certain characteristics or “factors.” Index leader S&P Dow Jones Indices uses three factors each to measure growth and value. Growth factors are defined as – three-year change in earnings per share over price per share; three-year sales per share growth rate; and momentum (12-month % price change). Value factors are – book value to price ratio; earnings to price ratio; and sales to price ratio. Click to read the rest of Macroscope 34.
