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Rekenthaler Report

Why Growth Stocks Are Winning

Surprisingly, the reason relates to income inequality.

The Rich Get Richer
Growth stocks have whupped value stocks over the past five years. Through Friday, the Morningstar Large Growth Stock Index had gained 15.46%, with Large Value at 10.96%. That annual gap of 4.5 percentage points leads to a big cumulative difference--a 105% profit for Large Growth, as opposed to 68% for Large Value.

"Smart beta" marketers claim that value stocks are for the bright bulbs, with growth companies appealing only to dummies. So, why are the beetle brows ahead?