Your investing style and tolerance for risk can help determine what type of stock mutual funds you invest in. The two main types of funds — growth and value — have different characteristics that can match your investing style.
Owning a mix of both funds is probably a smart move, but it can still be worthwhile to understand how each fund works. Here are some short explanations of growth vs. value funds:
Growth businesses are likely to reinvest profits, instead of paying out dividends to shareholders, as a way to grow. Growth stocks can be seen as expensive and overvalued.
Growth stocks tend to be newer companies with products that are expected to be in high demand in the future.
Value funds are stocks that are undervalued…