Sound Income Strategies co-chief investment officer Eric Beyrich discusses why value investing could dominate in 2025.
"I think the value investor will come back next year," Beyrich tells Yahoo Finance. He presents "two arguments" supporting value stocks. First, he cites the mathematical duration argument, explaining that value stocks typically perform better in higher interest rate environments. Second, he points to "abject extremes," noting that, while the S&P 500 trades at nearly 25x forward earnings, the average stock trades at around 18x forward earnings.
"There’s a big divergence in what people are paying for these high-growth names, and they’re paying for them cause they’re scarce," he explains, contrasting this with the broader market’s slower growth rate.
"It’s just going to be a shifting away from the more expensive names," he tells Yahoo Finance, acknowledging that, while these companies have strong fundamentals, their valuations have become excessive, whereas "other things that have more challenged fundamentals are going to start to look a little more stable and do better."
Beyrich specifically recommends Pfizer (PFE) and GSK Plc (GSK) as promising investment opportunities.
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