Man drawing a red line prevailing upward Which style has performed better, growth or value? On a month-to-month basis, one style will generally outperform the other or vice-versa. Over a longer periods of time, divergent patterns have emerged. (Photo: Shutterstock)

It is commonly stated that investing and asset allocation involve the choice between three asset classes: stocks, bonds and cash. However, it has long been believed that certain types of stocks behave differently from other types of stocks.

This concept was first developed by Graham and Dodd in the 1930s, who believed that value stocks provided a premium return due to their true value exceeding their prevailing price in the market.

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