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Market Extra: Why investors shouldn’t give up on value investing just yet

Don’t write the obituary for value investing just yet.

The investing style remains deeply unpopular, having lagged the performance of growth stocks for years. But that doesn’t mean it should be overlooked, according to a white paper by O’Shaughnessy Asset Management.

Value stocks are shares of companies that are cheaper than their peers relative to earnings or other metrics. Value investors buy them, anticipating they will make up the gap. But for years, they have lagged behind the broader market as well as growth stocks, which are shares of companies whose earnings are expected to grow at an above-average rate.

Since the financial crisis bottomed out in March 2009, the broad large-cap S&P 500 SPX, +0.17% has outperformed the S&P 500 Value Index by 3 percentage points.

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