Investors may be in love with the ‘magnificent seven’ technology stocks, yet the top end of the stock market is notoriously volatile. That’s worth noting for devotees of passive investing, says Orbis Investments.
Investors remain concentrated, with most active assets in growth-style funds and passive assets concentrated in giant US technology shares. With valuations where they are today, that is a concern according to the Orbis team, which says diversification utilizing neglected stocks will be key.
Since tulipmania, good investment ideas have regularly been turned inside out after being taken to extremes. With 2021 setting all sorts of trading records, this presents an ‘alarming’ trend, especially for passive investors with lazy exposures.
The recent underappreciation of value stocks has made them an attractive proposition, but knowing the most important metrics to look at when appraising companies is crucial.
Using long-term data, Orbis Investments has been able to map out the current investment environment and chart a decade-long path of challenges and opportunities ahead in this pivotal whitepaper.Â