Even a log scale on a monthly chart does not do this Growth versus Value relationship justice…am expecting to continue to see asset reallocation out of growth over the next few weeks. pic.twitter.com/e0O59SvqI2
— Linda Raschke (@LindaRaschke) July 22, 2020
Today’s Chart of the Day was shared on Twitter by Linda Raschke (@LindaRaschke). It’s a monthly chart of Growth vs. Value ($IUSG/$IUSV) over the past 20 years. As you probably already know by now, Growth has absolutely trounced Value over the past two decades. However, in the last week or so Value has been outperforming Growth. In a tweet yesterday, Linda pointed out that this ratio has already put in a lower high on the daily chart, and could soon put in a lower low. The fact that you can’t even see short-term weakness on this long-term monthly chart speaks to how extended this relationship has become over the past few years. The question remains, is this the start of the great rotation out of Growth and into Value that everyone’s been anticipating, or is this just another pullback within a monster uptrend?