Fidelity Investments has a nice article on their site regarding Growth and Value cycles. For the last several years, value stocks (those that are priced cheaply but tend to be slower growing companies and oftentimes in more mature industries) have badly lagged growth stocks (those that tend to be faster growing but typically more expensive and more volatile than the broader market).
source: Fidelity Investments
According to their chart, growth has outperformed value for the last several years. Rob Arnott from Research Affiliates has more from an article he recently wrote (emphasis added):
….for the past eight years, value investing has been a disaster with the Russell 1000 Value Index underperforming the S&P 500 by 1.6% a year, and the Fama–French value factor in large-cap stocks returning -4.8% annually over the same period. But, the value effect is far from dead! In fact, it’s in its cheapest decile in history……value is currently cheaper than at any time other than the height of the Nifty Fifty (1972–73), the tech bubble (1998–2003), and the global financial crisis (2008–09).
The takeaway for us is that while the broad based US market (e.g. S&P 500) may be expensive, some areas do look pretty attractive, value stocks being one of them.