Investors play risky game ignoring value
Recent market volatility should serve as a reminder of the risky game many investors are playing by continuing to ignore a value and blindly chase momentum, according to Antipodes Partners’ chief investment officer Jacob Mitchell.
Although the recent volatility was a blip during an extended period of market extremes surpassing the dot-com bubble, investors should be reminded that when the dot-com bubble burst a number of good businesses de-rated mostly due to the fact they were trading at excessive initial multiples.
“Trying to pinpoint a market turning point is typically fraught, however we’re in for a very interesting period and extraordinary multiple dispersion leaves us confident that the long-term future market leaders are most likely to be today’s misunderstood lower multiple stocks,” Mitchell said.
Mitchell also cautioned that, opposite to what some investors might think, the value is not dead.
“In today’s market a value-style exposure in investment portfolios is arguably more important than ever for investors seeking capital preservation and long term growth.”
AUTHOR
Oksana Patron
Recommended for you
Women are expected to inherit US$124 trillion through the intergenerational wealth transfer, but Capital Group has found they are twice as likely to rely on social media for advice over a financial adviser.
Challenger Investment Management has raised $350 million during the offer period for its new ASX-listed investment structure.
A week after Lonsec downgraded multiple funds from Metrics Credit Partners, rival research house Zenith Investment Partners has opted to retain its ratings for the same funds.
Strong adviser engagement has helped Praemium reach $1 billion in inflows on its Spectrum offering, with a deal with Western Australian wealth firm Euroz Hartleys expected to add as much as $2 billion.
