Shares Magazine – May 23, 2019

AEQUITAS

40 | SHARES | 23 May 2019

Insightful commentary on market issues

G

rowth and momentum strategies have, by

and large, been the only game in town for

ƚŚĞůĂƐƚĮǀĞLJĞĂƌƐ͘^ŽŵĞƚŚŝŶŐĞǀŝĚĞŶĐĞĚďLJ

ƚŚĞŵĞƚĞŽƌŝĐƌŝƐĞŽĨƚŚĞEz^&ĂŶŐн/ŶĚĞdž͘

ƐƚĂďůŝƐŚĞĚŝŶϮϬϭκ͕ƚŚŝƐďĞŶĐŚŵĂƌŬĐŽŶƚĂŝŶƐϭϬ

ŚŝŐŚͲŽĐƚĂŶĞŐƌŽǁƚŚƐƚŽĐŬƐʹŵĞƌŝĐĂ͛Ɛ&ĂĐĞŬ͕

ŵĂnjŽŶ͕ƉƉůĞ͕EĞƞůŝdž͕ůƉŚĂďĞƚ;ƚŚĞƉĂƌĞŶƚŽĨ

'ŽŽŐůĞͿ͕Es//͕dĞƐůĂĂŶĚdǁŝƩĞƌĂŶĚŚŝŶĂ͛Ɛ

ĂŝĚƵ͕dĞŶĐĞŶƚĂŶĚůŝďĂďĂ͘

KEͳtzdZ&&/

dŚĞƌĞĂƌĞƚǁŽŝŶƚĞƌͲƌĞůĂƚĞĚƌĞĂƐŽŶƐĨŽƌƚŚĞ

ƉƌĞĚŽŵŝŶĂŶĐĞŽĨŐƌŽǁƚŚƐƚƌĂƚĞŐŝĞƐŽǀĞƌƚŚĞ

ƉĂƐƚĚĞĐĂĚĞ͘

&ŝƌƐƚ͕ĞĐŽŶŽŵŝĐŐƌŽǁƚŚŚĂƐďĞĞŶŵŽĚĞƐƚĂƚďĞƐƚ͕

ĂƚůĞĂƐƚŝŶƚŚĞtĞƐƚ͕ƐŝŶĐĞƚŚĞĞŶĚŽĨƚŚĞϮϬϬΘ

ĮŶĂŶĐŝĂůĐƌŝƐŝƐ͘ŶLJĐŽŵƉĂŶLJĐĂƉĂďůĞŽĨƉƌŽǀŝĚŝŶŐ

ŐƌŽǁƚŚŝŶƐƵĐŚĂŶĞŶǀŝƌŽŶŵĞŶƚŚĂƐƚŚƵƐďĞĐŽŵĞ

ŚŝŐŚůLJƉƌŝnjĞĚ͕ďLJǀŝƌƚƵĞŽĨƚŚĞŝƌƌĞůĂƟǀĞƐĐĂƌĐŝƚLJ͘

^ĞĐŽŶĚ͕ŝŶƚĞƌĞƐƚƌĂƚĞƐƌĞŵĂŝŶĂŶĐŚŽƌĞĚĂƚŽƌ

ŶĞĂƌƌŽĐŬͲďŽƩŽŵůĞǀĞůƐʹĞǀĞŶh^ŝŶƚĞƌĞƐƚƌĂƚĞƐ

ƐĞĞŵĚĞƐƟŶĞĚƚŽƚŽƉŽƵƚĂƚϮ͘ρйĂŌĞƌƚŚĞ&ĞĚĞƌĂů

ZĞƐĞƌǀĞ͛ƐƉŽůŝĐLJhͲƚƵƌŶďĂĐŬŝŶ:ĂŶƵĂƌLJ͘dŚŝƐŚĂƐ

ƚŚƌĞĞĞīĞĐƚƐ͘

/ƚĞŶĐŽƵƌĂŐĞƐʹŽƌĞǀĞŶŽďůŝŐĞƐʹŝŶǀĞƐƚŽƌƐƚŽ

ƚĂŬĞŵŽƌĞƌŝƐŬŝŶƐĞĂƌĐŚŽĨĂƌĞƚƵƌŶŽŶƚŚĞŝƌŵŽŶĞLJ͘

dŚŝƐŵĂLJŵĂŬĞƚŚĞŵŵŽƌĞǁŝůůŝŶŐƚŚĂŶƵƐƵĂůƚŽ

ďĂĐŬĐŽŵƉĂŶŝĞƐƚŚĂƚĂƌĞŐƌŽǁŝŶŐƚŚĞŝƌĐƵƐƚŽŵĞƌ

ďĂƐĞĂŶĚƌĞǀĞŶƵĞƐďƵƚŵĂLJƐƟůůďĞŝŶƚŚĞƌĞĚ;ĂŶĚ

ĐŽƵůĚƌĞŵĂŝŶƚŚĞƌĞĨŽƌĂǁŚŝůĞLJĞƚͿĂƐƚŚĞƌĞŝƐůĞƐƐ

ŽĨĂŶŽƉƉŽƌƚƵŶŝƚLJĐŽƐƚŝŶǀŽůǀĞĚ͘

ŝƐĐŽƵŶƚĞĚĐĂƐŚŇŽǁ;&ͿǀĂůƵĂƟŽŶƐĨŽƌŐƌŽǁƚŚ

ĐŽŵƉĂŶŝĞƐ͛ĞƋƵŝƚLJĂƌĞƐƚĞĚďLJůŽǁŝŶƚĞƌĞƐƚ

;ĚŝƐĐŽƵŶƚͿƌĂƚĞƐ͘

dŚĞĐŽŵďŝŶĂƟŽŶŽĨƚŚĞƐĞƚǁŽƉƌŽǀŝĚĞƐĂĚĞĞƉ

ƉŽŽůŽĨĐĂƉŝƚĂůǁŚŝĐŚƐƚĂƌƚͲƵƉƐĐĂŶƚĂƉƐŚŽƵůĚŝƚ

ƚĂŬĞůŽŶŐĞƌƚŽƌĞĂĐŚƉƌŽĮƚƚŚĂŶĞdžƉĞĐƚĞĚĂŶĚ

ĂůůĞǀŝĂƚĞƐƚŚĞƉƌĞƐƐƵƌĞƚŽŚŝƚŝƚďŝŐƐƚƌĂŝŐŚƚĂǁĂLJ͘

dŚĞŶĞdžƚĐŚĂƌƚĚŝǀŝĚĞƐƚŚĞǀĂůƵĞŽĨƚŚĞǀĂůƵĞ

ŝŶĚĞdžďLJƚŚĞǀĂůƵĞŽĨƚŚĞŐƌŽǁƚŚŝŶĚĞdž͘/ĨƚŚĞůŝŶĞ

ŝƐƌŝƐŝŶŐƚŚĞŶǀĂůƵĞŝƐŽƵƚƉĞƌĨŽƌŵŝŶŐ͘/ĨƚŚĞůŝŶĞŝƐ

ĨĂůůŝŶŐ͕ƚŚĞŶŐƌŽǁƚŚŝƐŽƵƚƉĞƌĨŽƌŵŝŶŐ͘

Value stocks have often performed well when inflation starts to pick up

Is it time to switch from

growth to value strategies?

Ez^&E'н/EyyDW>/&/^,Kt

^h^^&h>'ZKtd,^dZd'/^,sE

^ŽƵƌĐĞ͗ZĞĮŶŝƟǀ

EŽƚĂůůŝŶǀĞƐƚŽƌƐǁŝůůŚĂǀĞƚŚĞƟŵĞŽƌŝŶĐůŝŶĂƟŽŶ

ƚŽĞdžĂŵŝŶĞƚŚĞƐŚĂĚĞƐŽĨŐƌĞLJƚŚĂƚĐŚĂƌĂĐƚĞƌŝƐĞ

ƚŚĞĚŝīĞƌĞŶƚ&ĂŶŐнŶĂŵĞƐ͘ƵƚƚŚĞLJǁŝůůŬŶŽǁƚŚĂƚ

͚ŐƌŽǁƚŚ͛ŚĂƐůĞŌ͚ǀĂůƵĞ͛ĨŽƌĚĞĂĚ͘dŚĞƋƵĞƐƟŽŶƐƚŽ

ĂĚĚƌĞƐƐŶŽǁĂƌĞǁŚĞƚŚĞƌƚŚŝƐŝƐŐŽŝŶŐƚŽĐŚĂŶŐĞ

ĂŶĚʹŝĨƐŽʹǁŚĞŶĂŶĚǁŚLJ͍

h<Ύ h<Ύ

dŝŵĞƉĞƌŝŽĚ sĂůƵĞ 'ƌŽǁƚŚ

ϭϬLJĞĂƌƐ κϯ͘ςй εε͘ρй

ρLJĞĂƌƐ ;ϳ͘κйͿ Ϯρ͘Θй

ϯLJĞĂƌƐ ϭϳ͘ρй Ϯϭ͘ϭй

ϭLJĞĂƌ ;ϭϬ͘ϭйͿ κ͘Ϯй

ςŵŽŶƚŚƐ Ϯ͘Ϭй Θ͘ϳй

ϯŵŽŶƚŚƐ ;Ϭ͘ϯйͿ κ͘κй

h^ΎΎ h^ΎΎ

sĂůƵĞ 'ƌŽǁƚŚ

ϭςϳ͘κй ϮΘϳ͘ϭй

Ϯε͘εй ϳς͘ϭй

Ϯρ͘Ϭй ρϮ͘ϯй

ϭ͘Θй ε͘Ϯй

ϭ͘εй Θ͘ϭй

ϭ͘ϭй ρ͘εй

'ZKtd,^dZd'/^,s^/>zKhdWZ&KZD

s>hKsZd,W^d

^ŽƵƌĐĞ͗ZĞĮŶŝƟǀĚĂƚĂ͘Ύh<ĚĂƚĂďĂƐĞĚŽŶD^/h<sĂůƵĞĂŶĚD^/h<'ƌŽǁƚŚ

ŝŶĚŝĐĞƐ͘ΎΎh^ĚĂƚĂďĂƐĞĚŽŶ^ΘWρϬϬsĂůƵĞĂŶĚ^ΘWρϬϬ'ƌŽǁƚŚŝŶĚŝĐĞƐ͘