The PDF version of the September issue of ETFInvestor is now available for download.

If the link above doesn’t work, you can download this month's issue by copying this address into your browser: http://etf.morningstar.com/Newsletter.aspx?download=currentIssue

The cover story of the September issue explores how the market is changing and what, if anything, investors should do about it. Disruptive innovation and changing consumer preferences are transforming the business landscape. This has helped growth and tech stocks beat the market by a wide margin over the past decade, as their valuations have soared, much as they did in the late 1990s. Investors have been burned by this before, but there are important distinctions between now and the late 1990s. Unlike then, many of the market’s darlings are now growing profitably or are on track to reach profitability in the near term and have estab­lished or are digging economic moats.

The key question is whether the market is accurately valuing stocks’ growth opportunities. If market history can teach us anything, it’s that investors typically don’t undervalue growth, particu­larly when the valuation gap between value and growth stocks is unusually wide, as it is now. That said, there may be some pockets of growth the market is undervaluing. While the market isn’t perfect, it’s tough to beat over the long term. There’s nothing wrong with sticking to a total stock market index fund and letting it do the work for you.    

Here, you’ll also find content about:     

• How the Defensive Portfolio has performed this year and how it might look with a trend-following ETF
• ARK Innovation ETF ARKK and SPDR Russell 1000 Yield Focus ETF ONEY
• Tactical ideas to profit from a strong economic recovery from the pandemic
• Why foreign stocks have underperformed over the past decade and whether they still have a role in U.S. investors’ portfolios

Best,

Alex