Quote:
Originally Posted by Chas863
Nearly all of the stock mutual funds have taken a hit in the past week, but for some reason which I haven't figured out, the "value" type funds seem to be taking a harder hit than the "growth" or "blended" type funds. Does anyone have a reasonable explanation why the value funds are getting hit harder? I would think it would be the other way around (growth funds getting hit the hardest), but that's not the case.
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At least part of it is because oil prices are down and oil companies have been hit. Oil companies are normally part of the "value" part of the market.
Value stocks have underperformed Growth stocks for more than a decade, but the valuation differential between growth and value stocks is now quite larger. It's probably a good idea to tilt your portfolio toward value stocks at this time as it's rare for value stocks to underperform for such a long period of time. Value typically outperforms growth over long periods of time.
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