Here is why you should continue to invest in growth stocks

One of the eternal debates in the investment world is whether it's better to own growth stocks or value stocks. The answer depends upon what you find most attractive. For most investors, it's whatever gives them the best total return. In the last decade, that's been growth stocks.

Since March 2009, the Russell 1000 Value index has increased roughly 170 percent, which sounds impressive until you hear the Russell 1000 Growth index is up almost 100 percent more. The S&P 500, as you would expect, is right about in the middle.

Some of the biggest growth stocks performed so well that Wall Street had to create an acronym, "FAANG," to add some cachet (it takes too long, we decided, to refer to Facebook, Apple, Amazon, Netflix, and Google by name). Several times in recent years, the massive growth of large-cap technology companies helped ignite rallies in U.S. equities.

But FAANG stocks lost their bite in October. In the past six weeks, the technology sector has fallen more than 12 percent. Growth stocks in general are down about 10 percent. Value, meanwhile, weathered the storm considerably better, losing half as much over the same period. Some defensive sectors, like consumer staples and utilities, were even positive in that time.

All this begs the question: Is this the start of a longer-term trend where value outperforms growth?

The convenient answer would be to say yes. Before the October correction, the performance spread between value and growth reached its widest margin since 2001, and we refer to that period as the tech bubble for a reason.

The truth, however, is we believe growth stocks will continue to provide attractive returns in these later stages of the economic cycle. Value stocks pay higher dividends, but that makes them more vulnerable to rising interest rates, and the Fed isn't anywhere near the end of its tightening phase. Valuations on many growth stocks, meanwhile, are not as expensive as you may think because earnings growth has been so strong.

Just remember: There's a lot more to growth than just FAANG and technology. The key for smart investors will be to identify growth at a reasonable price.

Despite the headwinds from higher interest rates, the economic backdrop remains positive and this bull market is not dead yet. This latest correction could provide an attractive entry point for growth stocks that are currently on sale.

Ben Marks is chief investment officer at Marks Group Wealth Management in Minnetonka. He can be reached at ben.marks@marksgroup.com. Brett Angel is a senior wealth adviser at the firm.