UK VALUE VS GROWTH AVERAGE VALUATION PREMIUM
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The only reason for taking a short-term approach is if new facts emerge that undermine the original thesis shortly after you have bought an asset
earnings that they are generating today . But isn ’ t this another way of saying investors should do the hitherto unthinkable and embrace more of a short-term outlook ?
Oxymoronic Not according to Toby Clothier , head of the global thematic and strategy on team at Mirabaud Securities , who refers to the concept of short-term investing as “ oxymoronic ”. “ Investing , by definition , is generally a reasonably slow process that requires a degree of fundamental understanding of a particular security ’ s attributes ,” he says . “ Investing is by nature long term , defined as months , quarters or years , but most commonly the latter .” Richard Staveley , manager of the LF Gresham House UK Smaller Companies fund , agrees with him , saying the only reason for taking a short-term approach is if new facts emerge that undermine the original thesis shortly after you have bought an asset .
UK VALUE VS GROWTH AVERAGE VALUATION PREMIUM
-10 -20 -30 -40 -50 -60
Value vs growth ( AVG % premium on PE , PBV & PD ) Median
-70 75 80 85 90 95 00 05 10 15 20
Source : Schroders / MSCI Morgan Stanley research note trustnet . com