Each month we take a close look at an aspect of sector investing. This month, we are examining growth and valuation. Investors hunting for stocks that reasonably balance long-term growth prospects and current value characteristics might look at companies in the Financial, Information Technology, and Healthcare sectors. These are among the industry groups that are selling for (price/earnings)/(growth+yield) ratios at or below the S&P 500's ratio of 2.2. To generate the PEGY ratios, we use the P/E ratio for each sector based on forward earnings for the numerator. For the denominator, we average the growth rates for the past five years along with two years of forward estimates, this in order to achieve a less-volatile earnings growth rate trend. We then add the current yield, to approximate total return. As an example, the current S&P 500 P/E ratio is 20, the current yield is 1.2%, and the historical growth rate is 8.0%. The formula is 20/(1.2+8.0) = 2.2. Sectors with favorable growth and valuation characteristics, in addition to the three listed above, include Energy, Materials, and Communication Services. Premium-valued sectors with low growth rates include Consumer Staples and Materials. Based on our analysis of growth rates and valuations, along with other factors, we have established our current over-weight sectors as Information Technology, Financial, Healthcare, and Communication Services. Our under-weight sectors are Materials and Consumer Staples. Our Market-Weight sectors include Energy Consumer Discretionary, Utilities, Real Estate, and Industrial.

AIG is a leading provider of insurance products in North America and internationally. The General Insurance segment offers traditional property and commercial insurance along with a number of specialty products. The Life & Retirement segment offers variable and fixed annuities and a family of mutual funds. The company is based in New York and has operations in more than 130 countries. The stock is part of the S&P 500 index.

U.S. stocks closed higher following new labor market data that gave investors confidence in the economy. The S&P 500 gained 2.3%, its best day since 2022. The Dow advanced 1.76% and the Nasdaq was up 2.87%. Crude oil traded above $76 per barrel and gold rose $35 dollars to $2,467 per ounce.

American International Group is one of the largest insurance and financial services firms in the world and has a global footprint. It operates through a wide range of subsidiaries that provide property, casualty, and life insurance. The company recently spun off its life insurance operations (Corebridge), but still retains a majority stake.