Why value now? Why value now? http://www.federatedinvestors.com/static/images/fhi/fed-hermes-logo-amp.png http://www.federatedinvestors.com/daf\images\insights\video\bakhshian-video-oct-2020-small.jpg October 30 2020 October 30 2020

Why value now?

As the U.S. economy recovers, value might offer the best opportunities.

Published October 30 2020
My Content
Video Transcript
00:04
I'm Linda Bakhshian, Senior Portfolio Manager at Federated Hermes.
00:08
Why should investors consider value now?
00:11
Value has faced structural headwinds for the past decade or so, and there are many structural reasons for this, including low, persistent inflation, interest rates, and global economic growth rates. However, as the U.S. economy starts to open up, post-COVID, and we become used to more of a new normal, value may actually be the cheapest sector to own at this point. Value tends to outperform when we are coming out of a recession or when inflation is rising or growth rates are growing and margins are improving. At this point, we do see that global economic growth starting to improve as we can measure by PMIs, ISM, and very low inventory levels across all sectors on a global basis. In addition, at some point, we are going to get a vaccine, which is going to open up the economy even more. And third, I think we are probably going to get more infrastructure bill or fiscal stimulus that, in itself, is going to be inflationary into the system. And hence, we do think that this is a good time to move into value as investors think about their portfolio in 2021.
01:31
Disclosure: Views are as of October 20, 2020, and are subject to change based on market conditions and other factors. Views should not be considered a recommendation for any specific security or sector. Investments are subject to risks and fluctuate in value. Value stocks may lag growth stocks in performance at times, particularly in late stages of a market advance. Due to their relatively high valuations, growth stocks are typically more volatile than value stocks. Past performance is no guarantee of future results. Purchasing Managers Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. ISM Manufacturing Index measures manufacturing activity based on a monthly survey conducted by Institute for Supply Management (ISM). Federated Equity Management Company of Pennsylvania 20-10164 (10/20)
Tags Equity . Markets/Economy . Coronavirus .
DISCLOSURES

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

Investments are subject to risks and fluctuate in value. There is no guarantee that any investment approach will be successful.

Value stocks may lag growth stocks in performance, particularly in late stages of a market advance.

Due to their relatively high valuations, growth stocks are typically more volatile than value stocks.

Past performance is no guarantee of future results.

Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

The Institute of Supply Management (ISM) manufacturing index is a composite, forward-looking index derived from a monthly survey of U.S. businesses.

Federated Equity Management Company of Pennsylvania