As U.S. stocks flirt with record highs, the well-documented underperformance of value stocks accelerated. But underneath that underperformance lies an interesting trend that could give investors encouragement, even as some prepare for a market correction. Within the broader growth sector, the most expensive, high-growth stocks have outperformed, while cheap, high-growth stocks have severely underperformed. More specifically, value has exhibited a near-zero return spread in low-growth stocks, and an extreme negative spread in high-growth stocks. Typically, the value premium is rewarded in both high- and low-growth pockets of the market. The key is to find growth at the right price, because overpaying for growth does not pay off over the long run. But simply buying the cheapest high-growth stocks is not necessarily the answer either.view more white papers
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