Skip to Content
Fund Spy

Growth Funds May Be Riskier Than They Appear

Take backward-looking risk measures with a grain of salt.

Mentioned: , , ,

The market has delivered a shot across the bow for growth stocks in recent days. Whether it's the beginning of a true correction for the stocks that have driven this current rally is anyone's guess. At the very least, it provides an opportunity to think about risk. 

Last year I wrote about how no two bear markets are identical and how it's difficult to predict whether value or growth stocks will hold up better in the next one. Yet, somewhat surprisingly, growth stocks fared better than their value counterparts in each of the last three down markets (2007-09, 2011, and 2015-16).

Kevin McDevitt does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.