For growth managers, the challenge is not only buying a stock early enough, but also selling prior to a correction in price. The goal of value managers is to seek out companies whose stocks are currently undervalued - that is, the firms' underlying earnings power is not reflected in their stock prices. This can be a result of many factors, such as short-term earnings disappointments or investor apathy. Sometimes, new companies may not be sufficiently followed by market players to have much price appreciation. Whatever the reason for the undervaluation, value funds tend to be less risky because there is not much room for their portfolios' stock prices to fall.
Managers tend to buy and sell stocks more slowly, resulting in lower portfolio turnover.
Value managers seek to achieve above average results in up markets and by outperforming in down markets. Consistency in performance is a key objective.