Are value funds making a comeback?
In fits and starts. They do well for a couple of months, and then they seem to give it all back. What’s hurting them right now are bank stocks. Value funds are usually big players in financials, and many big banks have been warning about lower earnings and larger-than-expected loan losses. There’s another problem: Value funds tend to own economically sensitive companies, and with the economy slowing down, I don’t see how their business prospects are going to get better. Q: Jeff, do you have a forecast on the market in the next six months, and thus what kind of funds might be the smartest investments? A: I think the stock market will do better in the second half. We’ve had a correction in the first half, and some of the excesses have been washed out. The fourth quarter is usually a good time for the market, as people begin to focus on the coming year’s earnings and forget about the current year. I would stick with the quality growth stocks and the funds that invest in them. I think tech
