During stable economic conditions and strong investment returns, conservative investors are often induced into taking higher risks. In the late 1990s this allowed higher risk growth investments to be incorporated within portfolios.
Conversely, poor market and economic conditions induce a move towards defensive secure stocks with low earnings growth. The risks are clear, buying high and selling low. During periods when value under performs there is pressure to increase the quality of the portfolio, as indeed happened during the late 1990s. Periods of strong out performance of value stocks will often force a move towards poorer quality companies as the equity risk premium on value investments narrows and dividend yields fall. The risks here are selling low and buying high on the one hand and increasing risk on the other.
For growth investors, periods of strong investment returns and economic stability raises the price and risk of growth, eliminating the performance differential between it and the market. The risk here is to move to more speculative growth investments. Different economic and market conditions can force managers to move outside their investment style, increasing risk and reducing long term value. While investment discipline should not adhere blindly to its beliefs, it should not be affected by short term performance considerations. A style should only move outside its boundaries to reduce risk or add value.  | 
