You may be able to give your portfolio returns a boost by investing in
certain large-company stocks -- that is, those that are selling at a
discount or those that are expected to increase their earnings at a
decent clip.
In general, value investing (buying beaten-down
stocks that are poised to rebound) tends to outperform growth investing
(buying firms with rapidly increasing earnings).
From 1928 to
2011, as a group, U.S. large value stocks delivered 10.8% average annual
returns, vs. 8.7% for their growth counterparts. But this strategy
requires guts and patience. And there are long stretches where the
category lags, like the past 10 years.
So also cherry-picking
the right growth stocks can add octane to your portfolio, without the
risk of burnout. Here are some value picks from Wally Weitz, manager of Weitz Partners Value and some growth picks from Larry Puglia, manager of T. Rowe Price Blue Chip Growth.
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