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How Should Investors Balance Growth and Value in a Portfolio?

By Demitri Kalogeropoulos and Asit Sharma – Jan 4, 2022 at 5:00PM

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There's no need to bet too heavily in one area.

What is the right balance in a portfolio between growth, value, and dividend stocks? In this video from "The Virtual Opportunities Show," recorded on Dec. 21, contributors Asit Sharma and Demitri Kalogeropoulos share their personal mix and explain why they each focus on growth but make sure to diversify into other asset classes, too.

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Asit Sharma: Now, the second question is so interesting. What lessons have you learned from your father as an investor? How are you different? Can you share the allocation of your portfolio? Growth stocks, dividends, REITs, value stocks. Personally, I've got, I think now in terms of portfolio way, I'm up to like 80 percent in growth stocks. They have really shifted the weight of my portfolio. Then, probably evenly divided between the dividend stocks and the value stocks I like to double with. Right now, I'm very growth focused in terms of where I'm directing money in my portfolio. I have a Jim Gillies spent in me. I was just talking about that earlier today on the Industry Focus podcast. Lessons I've learned from my father. My father and I have very different styles. He is more of a swing investor and a trader. But I think what I've learned from him, interestingly enough, is that it's OK to have your own investing style.

For a long time, I was like, dad you have to hold stocks. You can't just get out of a stock after a month and you have to really learn about it. But everyone's mindset is different. You have to find what works for you and at the end of the day, we're all wired differently. I have different experiences than my parents did. I look at the world differently. I don't really trouble myself too much. If someone that I love has this big loss version that they don't want to take a loss. They get out of stock when I would normally myself hold for years. I would love to hear Demitri's thoughts on what his portfolio looks like, how it's allocated. Given that you follow a lot of really solid companies in the consumer space, in the retail space. Very curious to throw this question directly at you, Demitri.

Demitri Kalogeropoulos: I would say the numbers you gave out are about the same for me, maybe something like 80 percent growth. Somewhere around that 20 percent in the dividend and value area, I would say my new money would be tending toward that more conservative side, more than dividend and more ETFs like Vanguard, total stock market funds have been mainly my growth. I would probably attribute that to the fact that growth has done so well over the last eight or nine years. I've had a few really big winners, and that's not because I've just been consistently putting a lot of money into growth all that time, but I've had a few really big stocks have grown a whole lot over the last seven or eight years. Growth, has just become, as a consequence of that, a bigger part of my portfolio, which I'm fine with, and I know that because I've gone through enough upon through to real big draw downs. The financial crisis was earlier on in my investing career, but it did my portfolio and half.

Then two years ago in March when the pandemic hit, that 40 percent hit or so in two or three, in a week and a half, I experienced that and I didn't lose a whole lot of sleep over that particular thing. I personally, I'm comfortable with that level of volatility, which I understand a whole lot of people aren't so totally understand if you'd rather, depending on where you are too in your investing career, if you're thinking retirements closer down the road and you want to start taking that money out, I understand that, but I'm personally pretty happy with that.

That 80 percent focus on growth, I like those. I like those stocks too, but I do buy a lot of dividend payers too I think that just helps balance that out. I like both of those.

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