A recent Greenbackd blog post brought up the contrast between asset-based metrics and income-based ones. Lately I came across an Interactive Investor blog post and was thinking about the transition among growth, value, and balance sheet during a business cycle. In brief, investors favor value stocks in early bull market, growth stocks in late bull market, and balance sheet in bear market. Now it’s clear to me that investors are just swinging between asset and income. In a bear market, investors are conservative, so they favor asset and chase solid balance sheet. In a bull market, investors are aggressive, so they favor income and chase growth. And value is just a transitory choice in between.