Style wars aren't just for the supermodels anymore. Investors have been ricocheting between value and growth investing styles over the last few years. Which investing style is the best one right now? It's a tough choice; both growth and value strategies offer compelling advantages in today's difficult market. Luckily, there may be a way to have your value cake and eat a growth one too: Buy growth stocks that can still perform when value soars, and buy value stocks that won't wither when growth is on the go.

We'll never forget the incredible returns on growth indexes back in 1999, when they outperformed value by 60% -- until technology collapsed in the first quarter of 2000. Since then, value has had its revenge. From 2000 to the present, value stocks are up about 1% (as measured by the Russell 3000 Value index), and their growth brethren are down 42.4%.

So score a point for value. Indeed, history shows that value typically outperforms growth coming out of a recession. According to a Leuthold Group study of the past seven recessions, the top-performing sectors coming out of a recession include typical value stocks such as aerospace and defense, railroads, basic materials and consumer cyclicals such as retail, autos and housing.

But that may not be the case this time around. Many of those stocks have already made their moves. A lot of the sectors that are most sensitive to an economic recovery have already anticipated one, and now trade at valuations that are well above their recession lows. Don't get me wrong -- I like a lot of the cyclical stocks: auto-parts suppliers,

paper stocks and industrials. The point is that its time for more balance. So you may want to consider increasing your exposure to growth.

Indeed, there are signs that growth is on the verge of outperforming value. For the trailing three months ending Dec. 3, the Russell 3000 Growth index is up 3.6%, while its value counterpart is off 2.5%, with growth beating value by 360 basis points in November alone. The chart below shows the ratio of the growth index relative to the value index. When the solid line is rising, growth is outperforming value, and vice versa. You can see how dramatic value's outperformance has been in the last year, and how very recently growth has reversed its downward slide. (The shaded areas represent recessions.)

Large-Cap Growth vs. Large-Cap Value

Source: The Leuthold Group 2001

So it's time to load up the boat with traditional growth stocks, like technology, right? Uh, wait a second. Technology stocks have had a big run lately; the

S&P 500

technology sector is up 33% for the past two months. I'd be cautious about chasing this technology rally for much longer.

Jim Floyd, senior analyst at Leuthold, tells me the recent tech move is largely a seasonal momentum play, and that though historically, technology tends to do well in the last few days of December, "it's probably a good time to take some profits."

So how can you heat up your portfolio's performance with growth stocks without getting burned by technology? Ed Keon, Prudential Securities' quantitative analyst, has compiled a list of stocks that are in the growth indexes but which perform the same whether the value or growth style is winning.

Keon, for one, is not as positive on technology now as he was when he recommended growth stocks in October. "Part of the reason we recommended growth has been taken away. Tech has done so well," says Keon. One way to hedge your bets as a growth investor right now is to take postions in the health care sector. Keon cites

Merck

(MRK) - Get Report

, for example, "which has been acting more like a value stock."

But when growth moves, you're still going to get good upside with health care stocks. Growth managers can't avoid owning them -- in a big way. Health care represents over 26% of the S&P Barra Growth index, one of the indices growth managers use as a performance benchmark. This is the largest weighting of any sector, including technology, which represents just 23.6%.

Merck wouldn't be my first choice, however. Instead, I'd look at

Bristol-Myers

(BMY) - Get Report

and

Pharmacia

(PHA)

-- two big drug stocks that I have

recently

recommended. They both have attractive valuations and the potential for improving earnings growth.

Keon's work also produced a number of typical value stocks that tend to act more like growth stocks when growth is outperforming. His list of companies with these characteristics includes quite a few stocks in the consumer staples and financial services sectors.

A couple of big-cap names that he highlights that I like as well include

American International Group

(AIG) - Get Report

in financial services. Earnings estimates have been rising recently for AIG on the heels of a better pricing outlook for the property and casualty insurance sector.

An interesting consumer staples pick is

PepsiCo

(PEP) - Get Report

, growing 13% and still selling at a discount to

Coca-Cola

(KO) - Get Report

.

Odette Galli writes daily for TheStreet.com. Before coming to TSC, Galli was a writer at SmartMoney Magazine. Prior to that, she worked as a senior manager at Ark Asset Management where she managed $3 billion in institutional assets. In addition, Galli was a senior vice president at J & W Seligman. She has also served as a research analyst for Morgan Stanley & Co.

In keeping with TSC's editorial policy, Galli doesn't own or short individual stocks, although she owns stock in TheStreet.com. She also doesn't invest in hedge funds or other private investment partnerships. She invites you to send your feedback to

Odette Galli.