The following article was written by the team at Morningstar. We found this to be a timely analysis of risks related to bond investing.
The battle between large-cap growth and value investing has been going on for years, with each style trying to seize the spotlight. Although there is an annual frontrunner, history shows that leadership shifts with market conditions. In the bull market of the late 90s, growth stocks offered superior returns. But, since that bubble burst in 2000, value went on quite an impressive run. Growth seems to have captured the spotlight more recently between 2007 and 2010; however, 2011 was a mixed bag. Many wonder if the tables have turned yet again. Determining your allocation between growth and value can be difficult. Which style is more stable, or which will provide higher returns? Unfortunately, there is no definite answer. Focus on finding the option that offers the most upside for your situation: perhaps it’s growth, maybe value, or possibly a blend of both.