Three market myths about value investing

Bill Nygren, CFA®, CIO-US and Portfolio Manager at Harris | Oakmark, debunks three myths associated with value investing and explains why investors shouldn’t overlook the category given today’s markets and upcoming US election:
- Myth 1: Value stocks require a robust economy. In fact, the Russell 1000® Value Index shows value stocks tend to do poorly when the economy is bad. So we believe that unless you are expecting a bad recession, which is rare, you may want to ignore the economic outlook when you're considering adding value to your portfolio.
- Myth 2: Investors think value requires rising rates. We believe that unless you think rates are in for a very significant drop, you should ignore them when considering how much of your portfolio you want allocated to value.
- Myth 3: Election years are a bad time to be a value investor. The data says otherwise. Historically, the S&P 500® Index has delivered 11% returns during election years since 1928, while the Russell 1000® Value Index has delivered 10.5% returns during election years since 1980.
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