Growth Investors Are Feeling Some Pain

Staying committed to a diversified portfolio is difficult when one particular asset class consistently outperforms everything else for several years in a row. That is what investors have had to deal with as growth stocks, particularly tech stocks, outperformed value stocks 6 years straight.

Those that stuck to their plan and rebalanced through this divergence in performance are finally being rewarded as the prospect of higher interest rates has led to a mass selloff in growth stocks.

Large-cap growth stocks are down 20% while large-cap value stocks are down only 6% year-to-date. For those that ventured out and picked up individual stocks, the pain could be much worse with some of the “work-from-home" favorites of 2021 getting absolutely crushed (Netflix down 68%, Paypal down 53%, and Etsy down 57%). 

I can certainly understand the pull to play the market but it’s times like these that remind us all why staying committed to a long-term “boring” investment strategy can pay off over time.

Thank you for reading,

Alex

This blog post is not advice. Please read disclaimers.