Value stocks have had a great run, but they are not over-valued.
It is the highish valuations of growth stocks that should worry us more than those of value stocks.
Sometimes markets are efficient and changes in share prices don’t provide a buying or selling opportunity.
I say this because value stocks no longer offer great value. The dividend yield on the FTSE 350 high-yield index (a gauge of value stocks) is now only 2.2 percentage points above that on the FTSE 350 low-yield index. That’s close to the lowest gap since 2007. Which suggests that value stocks are relatively expensive.