In fact, there is growing evidence that more investors are embracing value assets. While stocks have moved higher over the past two weeks, the thrust of the move has been driven by value, rather than the momentum names that dominated gains earlier in the year. Investors continue to sell growth funds and buy value funds.

Another data point supporting the rotation into value: last week, investors sold healthcare, one of the more expensive sectors, and bought energy, one of the cheapest sectors and one I particularly prefer. In short, for now, I would stick with a value bias, particularly within U.S. stocks, where valuations are the most stretched.

Sources: Bloomberg, BlackRock research

Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.