Growth stocks out of touch with reality
Updated
MGK: Vanguard's growth mega cap etf
MGC: blended mega etf
MGV: value mega etf
MGK's divergence away from MGV reflects the fact that the surging prices of stocks such as TSLA have become far overvalued relative to stocks with good price to book ratios (ie banks). This divergence can't last, its the largest ever seen and totally out of touch with reality. Growth is always tied to value and higher risk should always be rewarded, but MGK is due for a set back. I recommend young investors (like me) shift away from growth and into blended to dampen the impact.
MGC: blended mega etf
MGV: value mega etf
MGK's divergence away from MGV reflects the fact that the surging prices of stocks such as TSLA have become far overvalued relative to stocks with good price to book ratios (ie banks). This divergence can't last, its the largest ever seen and totally out of touch with reality. Growth is always tied to value and higher risk should always be rewarded, but MGK is due for a set back. I recommend young investors (like me) shift away from growth and into blended to dampen the impact.
Note
In fact, now that I look at it, MGK is even overvalued wrt MGC...Note
I believe that at a minimum MGV will rise 12% wrt MGK or MGK will fall 12% wrt MGV within the next year.
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