Growth versus value in stocks

Q: Should I invest in “growth stocks” or “value stocks” — which is better? — G.G., Portland, Ore.

A: You don’t have to choose one or the other — some of the best stocks to invest in are both. Growth stocks are tied to companies that are increasing their revenue and earnings relatively rapidly, while value stocks are tied to companies with market values significantly below what they seem to really be worth. If you find a company that’s growing at a solid clip and it seems to be undervalued, that’s a very appealing proposition, offering a good chance of stock price appreciation. It’s best, overall, though, to favor undervalued stocks. Even if they grow slowly, they offer a margin of safety by not being overpriced.