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Deep Dive: Here’s a powerful argument for favoring value stocks over growth stocks

Ernesto Ramos of BMO Global Asset Management helps manage funds that follow value and growth strategies. He says value may soon win out over growth after years of underperformance.

Growth stocks, helped by yearslong ultra-low interest rates and a growing economy, are trading high relative to value stocks based on historical price-to-earnings ratios. Investors’ favored growth stocks include Apple Inc. AAPL, +3.92% Amazon.com Inc. AMZN, +0.56% and Alphabet Inc. GOOG, +2.39%GOOGL, +2.41%

“But eventually all these trends will revert,” he said in an interview April 26. “ ‘Eventually’ might mean a couple of weeks, a couple of months, a couple quarters.

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