Rising inflation and interest rates have squashed growth stocks' valuations in 2022, making them the cheapest they have been for several years. Although returns are generally down for this side of the market, is now, ironically, the best time to be a growth stock picker?
Growth stocks have generally had a better ride than value over the past decade. The combination of ultra-low interest rates and bountiful liquidity provided via quantitative easing was the ideal environment for growth stocks, and the performance gap between the two styles widened significantly, especially during Covid when these factors were exacerbated even further. During that time, growth stocks, especially on the US tech side, had arguably become too expensive. Apple entered 2022 as the first company to reach a $1trn valuation and Tesla experienced 740% growth in 2020 alone, with one...
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