Value or Growth? Choose Both

The Case for Owning Value AND Growth

How to Ride Growth Funds Without Getting Bucked

The Big Screen: Big-Cap Growth Funds

The Big Screen: Small- and Mid-Cap Growth Funds

The Big Screen: Big-Cap Value Funds

The Big Screen: Small- and Mid-Cap Value Funds

Too often fund investing feels like an endless series of near misses, but it doesn't have to be that way.

A cursory look at just the past 10 years highlights a painful, prevalent trend: Once an investment style gets the wind at its back, money gushes in -- often just in time for its sails to slacken. This is true whether you're talking about funds that follow a tech-heavy growth style or funds whose more price-conscious, tech-light style earns them a value label.

Consider investors' growing appetite for value funds. In 1998 and 1999, the average big-cap value fund gained 6.6% and 6.1%, respectively. That paled in comparison to the average big-cap growth fund's 34.1% and 39.2% gains in the same years. So, redemptions from value funds outpaced investments in 1999. Unfortunately, outflows continued in 2000 when the average big-cap value fund was one of the fund world's few ports in the past year's storm.

First You Get the Performance, Then You Get the Money, Value Style
A look at large-cap value funds' average annual returns and cash flows over the past 10 years, you see the same pattern. Figures in billions of dollars

Sources: Morningstar and Financial Research Corp.

And consider that a record $119.6 billion gushed into the average big-cap growth fund last year on the heels of the category's 39.2% average gain in 1999. But all that money showed up just in time for a tech-driven tumble.

First You Get the Performance, then You Get the Money
That's the pattern if you look at large-cap growth funds annual returns and cash flows over the past 10 years. Figures in billions of dollars.

Sources: Morningstar and Financial Research Corp.

It's instinctive to buy shares of whatever funds appear to be riding high at any given time, but it's an urge we should all fight. The problem with performance chasing is that it usually insures that you're buying high and might end up selling low, instead of vice versa. Over the past two weeks, we've cobbled together a modest coterie of stories on the topic that can help you sidestep this trap. Here they are in one tidy package:

The Case for Owning Value AND Growth: Historical returns show that it makes more sense to blend both growth and value funds, rather than choose one to the exclusion of the other.

How to Ride Growth Funds Without Getting Bucked: Here we look at how you can build a fund portfolio that uses both growth and value styles to earn marketlike and above-market returns with lower risk.

The Big Screen: If you're underrepresented on the growth or value front, we've sifted big-cap growth funds, big-cap value funds, small- and mid-cap growth funds and small- and mid-cap value funds, to save you some shoe leather.