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Market Update

Is Value Investing Dead?

Probably not, says contributor John Waggoner. But perhaps more importantly, the concept is being redefined by active money managers.

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Your kindly grandfather probably gave you great advice, like "Never make toast in the shower," and "Beets cause leprosy." He probably also told you that over time, value stocks outperform growth stocks.

It's hard to argue with buying cheap stocks for the long term. Unfortunately, value stocks have been lagging growth stocks for the past 30 years, which qualifies as long term for most people. The real problem might not be the notion of buying low and selling high, but the way value is commonly defined. It might be time for an update.

John Waggoner does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.