As a follow on to our articles Growth vs. Value Investing—How do These Two Styles Differ? and Can You Be Both a Growth and a Value Investor?, in this article we focus on income (dividend) investing as it pertains to equity portfolios. What is income (dividend) investing and where do dividend investors fit within growth and value investing styles?

Growth and value investing are two types of investing styles, each with strong proponents and opponents… but can you be both a growth and value investor? The short answer is yes.

Two of the most common investing styles are growth investing and value investing. These styles can be at the opposite ends of the stock selection spectrum: to select a growth stock, investors look for companies that have current and future earnings growth potential; to select a value stock, investors look for stocks that based on their analysis are currently undervalued. What is the difference between growth and value stocks, what are some potential investor biases for each, and is one style ultimately better than the other?

In many ways, human beings are herd animals. In judgement and in opinion-forming, we tend to conform to the norm—as defined by the herd around us. But as an individual investor you need to be wary of the dangers of investment herd mentality and not let it influence your investment strategy: what is herd mentality, how can you identify it, and how can you avoid it?

“An investment in knowledge pays the best interest. When it comes to investing, nothing will pay off more than educating yourself.” – Benjamin Franklin

We couldn’t agree more with Benjamin Franklin’s comment. What many perceive to be the reality about investing is often full of misconceptions.

Let’s review 6 common misconceptions about investing in the stock market—because your future will thank you for it.