Buy the Unloved
Buying what others have been selling is a winning strategy.
Mentioned: Meta Platforms Inc (FB)
, Invesco Comstock A (ACSTX)
, Ariel Appreciation Investor (CAAPX)
, Jensen Quality Growth J (JENSX)
, ClearBridge Aggressive Growth A (SHRAX)
, Vanguard PRIMECAP Inv (VPMCX)
, MFS Value A (MEIAX)
, Vanguard Value Index Adm (VVIAX)
, Hotchkis & Wiley Mid-Cap Value A (HWMAX)
, Amazon.com Inc (AMZN)
A version of this article was originally published in the January 2018 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor here.
Contrarian thinking doesn't come naturally to most investors. Fund-flow patterns tell us they buy what's done well recently and sell what hasn't. This pattern can become self-reinforcing. Strong flows drive up stock prices, attracting more return-chasing investors and bidding up prices further.
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Christopher Davis does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.