Friday Investment Talk: Valuations, Growth to Value Transition, Gold and Healthcare Stocks

Are markets overbought? The narrow bull market in FAANG and some other technology stocks has led to concern among analysts that stocks are out of sync with the economy. We explore how interest rate assumptions affect analyst pricing in discounted cash flow models and lead to inflated asset prices.  A discussion of the opposite case – where inflation fears cause higher interest rates – reveals reasons to be concerned when COVID ends.

This week began a noticeable move from growth and momentum stocks to more value companies. Can that trend continue? We discuss if the healthcare and gold stocks will be the beneficiaries of this trend.

Seasonality is explored as investors head into the worse months of the year.