Financial Samurai - Forums

General Investing => Stocks And Index Funds => Topic started by: Jsmith on September 18, 2018, 12:53:46 PM

Title: Growth vs. Value Funds
Post by: Jsmith on September 18, 2018, 12:53:46 PM
I'd be interested to hear everyone's opinions on growth funds vs. value funds. For longer term investment horizon individuals, would growth stock funds make more sense because they will likely grow more during times of economic expansion? And vice versa, do value stock funds make for sense for shorter term investment horizon individuals who don't want to be quite as exposed to the wild swings of a growth fund?

I'd be interested to hear if/how anyone is allocated between these two types of funds. Clearly growth funds have been on fire since 2008, so it's easy to be drawn towards them.

Just wanted to get the conversation going.
Title: Re: Growth vs. Value Funds
Post by: numbers on September 18, 2018, 01:42:59 PM
Historically, the answer is already out there , over the LONG term Value wins, that said in the last 10 years Growth has been the obvious choice by far.
So much so that DFA and others like them have come out with new "momentum" funds because touting Value has been a loser in the recent past.

Personally I am starting, slowly, to move a bit from growth (in which I have been thankfully seriously overweighted in the last 10 years) to Value.
Title: Re: Growth vs. Value Funds
Post by: Young And The Invested on September 18, 2018, 07:34:42 PM
In the long-run, value should win out because of mean reversion.  However, since the financial crisis, growth has been the better performer.  To guard against this, I've held both types of stocks because inevitably this trend will switch and I don't want to miss out.  For the truly patient, value stocks are the better bet.
Title: Re: Growth vs. Value Funds
Post by: Bonsai on October 03, 2018, 12:47:43 PM
For the most part, investing in growth versus value is an active management strategy (someone has to determine if a stock is a growth or value stock and by what metric - PE?) to be included in the fund.  For funds, I prefer a passive strategy of the whole index, e.g., Nasdaq, S&P, etc.  I have seen some funds take the index and (essentially) divide it in two sections, designating one section as value, the other section as growth, e.g., the 1/2 section with the low PEs as value and the 1/2 section with the high PEs as growth.  If I were to invest in growth or value fund, I would take the above approach.  I do invest in individual growth stocks but the question was about funds. 
Title: Re: Growth vs. Value Funds
Post by: hyperobjeckt on October 05, 2018, 10:12:32 AM
Quote from: Bonsai on October 03, 2018, 12:47:43 PMFor the most part, investing in growth versus value is an active management strategy (someone has to determine if a stock is a growth or value stock and by what metric - PE?) to be included in the fund.  For funds, I prefer a passive strategy of the whole index, e.g., Nasdaq, S&P, etc

Same here, for value I use funds & for growth I pick stocks myself.

It's not like you can look at a financial statement and see a number that says "growth"... you have to use some sort of screen or logic to make that decision & I would rather just do my own amateur analysis :P

To answer the original question, I'm allocated more towards value & haven't really ever thought about time horizon affecting what kind of stocks to invest in. If I need money soon it wouldn't be in stocks anyway. Interesting to think about that, though.