Preferred stock has a set amount for dividends, which is not increased when the stock price increases, and increases in value much more slowly than common stock. The upside to preferred stock is that you stand a greater chance of getting your money back if a bankruptcy occurs. Growth stock yields higher profits for higher prices, generally does not pay dividends, and is severely affected by short-term market fluctuations. Growth companies do not pay dividends since they are establishments looking towards expansion and usually re-invest profits. The stock is risky since it is highly reactive to market fluctuations and world news.
Value stock is less expensive since it anticipates a turnaround and higher prices in the future.
The downside to value stock is that it may never reach its potential. Once again, you playing the part of the smart investor will diversify your portfolio with a mix of both stocks in your portfolio. First, you should identify companies you know about, businesses you patronize, and companies related to your own interests. Then you should watch them for awhile. Definitely, compare your chosen company with at least two of its competitors.