Retirement Insights

The Value of Character in Retirement Portfolios

The Value of Character in Retirement Portfolios

First Eagle Retirement Insight

The ongoing structural shift toward a knowledge-based economy heavily reliant on intangible assets has presented a challenge to investors seeking to identify undervalued stocks. 

Key Takeaways

  • Key-Takeaway

    The ongoing structural shift toward a knowledge-based economy heavily reliant on intangible assets has presented a challenge to investors seeking to identify undervalued stocks.

  • Key-Takeaway

    While growth indexes have outperformed consistently since the global financial crisis, 2020 was a generationally poor year for value. As a result, relative valuation metrics between growth and value stocks entered 2021 at levels not seen since the dot-com era.

  • Key-Takeaway

    In our view, value investment should begin with defining the fundamental character of a business—the tangible and intangible assets that drive its performance—before assessing its price. The concept of value becomes a much broader tent when investment isn’t limited to only the statistically cheapest cohort of stocks.

  • Key-Takeaway

    Retirement plan investment menus composed of a diverse range of strategies—including research-driven value equity—may enable participants to construct portfolios that offer a smoother experience over time, encouraging adherence to long-term plans that seek a steady compounding of assets in real terms.