Growth sectors like technology, consumer cyclical, and communications have seen the brunt of the selling this year, and growth is now more “undervalued” than value sectors per CFRA.
According to CFRA: Stocks are ranked in accordance with the following ranking methodologies. Qualitative STARS recommendations are determined and assigned by equity analysts, with 5 being the highest rating.
But as stated in Fundamental Valuation: Is the Stock Market Cheap or Expensive? undervalued stocks can get much more undervalued (prices fall more) in a recessionary bear market.
Risk management is essential in bear markets.
For example, the S&P 500 is down about -23% so far and needs a 30% gain to get back to the prior high.
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