Growth Stocks vs. Value Stocks
by
Gregory Grant
In the last five years or so, a tremendous amount of money has flowed through the stock market into investor's pockets. The volatility of the market has led many to believe that the only kind of stock to invest in is one that's going to take off like a rocket and explode in a shower of profit. So are the growth stocks the way to go, or should the wise investor stay with the tried and true?
"You know this whole conversation about growth versus value has been an interesting discussion ... I say in particular in the last couple of years," said Patricia Bell of Merrill Lynch. "I think that probably the reason for that is with so much return coming from growth oriented type stocks because of the explosion that we've had in the NASDAQ market. That a lot of people have forgotten about value."
Perhaps, but maybe the growth stocks are just getting more publicity. The blue chippers have been around for a long time, and most analysts know they're not going anywhere anytime soon.
"Well I would say personally that for your average investor, they have a medium type risk tolerance and then it's really important that you have a very diversified portfolio," Bell said. "Diversified among asset classes and diversified among stock styles and having a blend of both value and growth can take a lot of the volatility out of a portfolio."
Each investor has to decide what level of risk tolerance they're comfortable with. Whether the decision is made to be aggressive or conservative, it's the growth and the value stocks that can make the difference.
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