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However, in the face of rising inflation, which the Fed deems “transitory,” it may be risky to invest in high-flying stocks, which have reached valuations that in some cases are not justified by their company’s growth prospects. This is because any market downturn could spell a significant price decline for these stocks. But it also could be an opportune time to bet on quality stocks that are trading at reasonable valuations. This year, value stocks have performed relatively well, as evidenced by the SPDR Portfolio S&P 500 Value ETF’s (SPYV) 19.7% returns year-to-date.
Despite performing well in recent months, shares of Oracle Corporation (ORCL) and AstraZeneca Plc (AZN) appear undervalued at their current price levels, given these companies’ growth attributes. So, we believe these stocks could be ideal bets now.
