Our Outlook for Financial-Services Stocks
A summer rally in financial stocks has lowered the margin of safety for investors in this volatile sector.
Over the past few months, financial-services stocks made up the ground lost in the second quarter, with the aggregate Morningstar price/fair value estimate ratio for stocks in the sector rising to 87% from 78% over the summer. While a few bargains remain, low prices are for the most part accompanied by higher risk and/or near-term challenges such as low interest rates and lackluster capital markets.
Jim Sinegal has a position in the following securities mentioned above: BLK. Find out about Morningstar’s editorial policies.