For Smoother Returns, Add Value Stocks
If the stock market of the 1990s is any guide, the meek will almost certainly inherit the earth.</br></br>The fact is, boldness hasn't been rewarded in recent years. Ventured into emerging markets? You got clobbered. Tokyo stocks? They have been hammered. Smaller U.S. stocks? After showing promise early in the decade, they too have faltered badly.</br></br>Amid all this gloom, blue-chip U.S. stocks have barreled ahead, providing big gains for stock-market investors who were too timid to buy anything else. But even here, the more courageous have recently been singled out for punishment.</br></br>Companies are often divided into two camps, growth stocks and value stocks. Growth stocks promise rapid increases in sales and profits. Often, they are the sort of companies we admire, like Microsoft, Pfizer and Wal-Mart Stores. That makes these stocks easy to own.</br></br>Value stocks aren't nearly so lovable. Their sales and profitability are lackluster, which is why their shares languish at lowly prices compared with corporate assets and current earnings.