A version of this article previously appeared in the March 2019 issue of Morningstar ETFInvestor.
Value investing is probably the most intuitive investment strategy there is: Buy what's cheap and avoid or sell expensive alternatives. Valuations have an undeniable impact on investment returns. The higher they are, the lower future returns tend to be. Yet, valuations don't appear to be very helpful for tactical adjustments across regions, sectors, and factors, or for timing exposure to credit risk.
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Alex Bryan does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.