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Quoted: Growth and value are two fundamental approaches in stock and stock mutual fund investing. Many growth stock mutual fund managers look for stocks of companies that they believe offer strong earnings growth potential, while value fund managers look for stocks that appear undervalued by the marketplace.
Quoted: Both growth and value stocks have taken turns leading and lagging one another during different markets and economic conditions.
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Value stocks, often stocks of cyclical industries, generally tend to do well early in an economic recovery; growth stocks, on the other hand, tend to lead bull markets, which are normally fueled by falling interest rates and increased company earnings.
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Andrew Tobias' Managing Your Money used to have a really wonderful asset allocation module that explained everything and really helped you craft a good asset mix. With the right mix, you can minimize risk while increasing your return ... both at the same time, which is almost like magic.