Investing Classroom: Value, a 'Better' Approach?

Portfolio lesson 5.6: Own value stocks for diversification, not because you think they may have a performance edge

Morningstar 30 March, 2010 | 2:54PM

Some people believe in Santa Claus. Others believe in the Tooth Fairy. Many investors believe value stocks will outrun growth issues and be a lot less volatile along the way.

Is the value advantage a myth that belongs in the land of St. Nick? Those investing during the growth-driven 1990s would say yes. Academics and value-fund managers, on the other hand, would say no. Who's right?

This lesson will examine both sides of the debate, and explain what this means for your portfolio.

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