Investing Style

AAA

DEFINITION of 'Investing Style'

In the context of stock mutual fund investing, refers to using one of three possible approaches -- investing in value stocks, growth stocks, or a blend of value and growth stocks - to create a fund portfolio.


INVESTOPEDIA EXPLAINS 'Investing Style'

Value stocks are perceived to be less risky than growth stocks, which makes the blend investing style a compromise of the two. Investment style, along with company size, is the basic determinant of a fund portfolio's asset allocation and risk-return parameters.

Fund investors should look for a high degree of consistency in a fund's investment style. Frequent changes could be an indication of the fund's investment manager chasing performance, which surely involves increasing risk.

RELATED TERMS
  1. Warren Buffett

    Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire ...
  2. Risk Tolerance

    The degree of variability in investment returns that an individual ...
  3. Value Stock

    A stock that tends to trade at a lower price relative to it's ...
  4. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
  5. Blend Fund

    A category of equity mutual funds with portfolios that are made ...
  6. Portfolio Management

    The art and science of making decisions about investment mix ...
RELATED FAQS
  1. Why do banks securitize some debts, and how do they sell them to investors?

    Banks may securitize debt for reasons that include risk management, balance sheet issues, greater leverage of capital and ... Read Full Answer >>
  2. What should you take into consideration when choosing a portfolio management service?

    Hiring a portfolio management service or a portfolio manager should be a logical decision based on topics of consideration ... Read Full Answer >>
  3. Which markets are most prone to market failure from adverse selection?

    Adverse selection causes market failure -- a sub-optimal level of beneficial trades -- whenever material information cannot ... Read Full Answer >>
  4. What does it mean to be absolutely risk averse?

    Some people are absolutely risk-averse, which means that they cannot tolerate sustaining any sort of loss, even a temporary ... Read Full Answer >>
  5. Other than my savings account, what other types of holdings compound my interest?

    Investors and savers can use the power of compounding interest to accumulate wealth over time. Unlike simple interest that ... Read Full Answer >>
  6. What is the relationship between the cash ratio and liquidity?

    The relationship between the cash ratio and liquidity is that the cash ratio is one of three liquidity ratios used to compare ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Understanding The Mutual Fund Style Box

    Evaluate your investments with this simple tool.
  2. Retirement

    Too Many Mutual Funds?

    Is there a magic number you should be aiming for? Find out here.
  3. Professionals

    Style Matters In Financial Modeling

    If you're looking to get a job as an analyst, you'll need to know how to work it.
  4. Trading Strategies

    Understanding Bottoms & Bottoming Patterns

    Analysis lowers the risk of bottom picking by identifying common characteristics of securities transitioning from downtrends to uptrends.
  5. Economics

    What is Adverse Selection?

    Adverse selection occurs when one party in a transaction has more information than the other, especially in insurance and finance-related activities.
  6. Fundamental Analysis

    Explaining Expected Return

    The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome.
  7. Mutual Funds & ETFs

    U.S. Investors Are Seeking Opportunities Overseas

    A latest analysis leads to believe that many investors are applying a spring cleaning approach to their portfolios, rebalancing as the 1st quarter ended.
  8. Investing

    Three Portfolio Moves To Consider Now

    What portfolio moves should you consider making as the 2nd quarter kicks off? Before we focus on the future, let’s first reflect on the 1st Q surprises.
  9. Investing Basics

    Manage Investments And Modern Portfolio Theory

    Modern Portfolio Theory suggests a static allocation which could be detrimental in declining markets, making it necessary for continuous risk assessment. Downside risk protection may not be the ...
  10. Investing

    The Labor Market Recovery’s Missing Ingredient

    Job creation is running at the fastest pace since the 90s, and there is some evidence that wage growth is finally starting to accelerate, albeit modestly.

You May Also Like

Hot Definitions
  1. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
  2. Wash Trading

    The process of buying shares of a company through one broker while selling shares through a different broker. Wash trading ...
  3. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  4. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  5. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  6. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
Trading Center