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Don’t Make Me Say I Told You So 99

The Three Styles of Equity-Fund Investing

Every professionally-managed portfolio or fund has a stated
objective. Fund managers will also spell out the investment

strategy used to reach that objective in the most recent
prospectus. These guidelines let you know if the fund will invest

in stocks that are characterized as growth stocks, value stocks,
or blend/core stocks.

Value Investing

“Value investing is the premise that you can buy a dollar’s worth

of assets for 70 cents,” says Scott Schermerhorn, president of
Granite Investment Advisors and manager of the Granite Value

Fund. A value approach indicates that the fund will invest in
stocks of companies that the manager believes are trading

below their perceived value. They may be stocks of companies
that have had setbacks tied to the company specifically, the

industry they’re in, or the true value of the stock has not been
recognized by other investors.

Value investing became a mainstream investment philosophy
in the 1930s. It was first popularized by Benjamin Graham and

David Dodd in their classic book, Securities Analysis. Graham
and Dodd made the case that exceptional long-term returns

Chapter 3: You Must Have Growth In Your Portfolio