These stocks are growing, or are expected to grow, faster than the stock market average. The growth investor aims for big gains over the long term, but also faces risks as growth-oriented companies go through their ups and downs. In fact, short-term losses can be substantial and severe during down cycles. In the value style, investors look for stocks that are comparatively low-priced, but the price doesn't accurately reflect the company's potential and current assets. Thus, value investors are betting that the company's stock will rise again to reflect its true value.
Investors using an income style choose securities that produce regular but modest earnings.
Some examples include government-issued bonds or money market mutual funds. Income investments don't bring as much potential for gain as growth investments, but they also carry less risk for loss. Thus, income investors aim for fairly stable earnings over time. Your investment style depends on your goals, resources, and your risk tolerance. Other factors to consider are your age, financial goals, and investment time frame.