The battle of growth versus value investing rages on in 2010.

Growth stocks represent companies whose better-than-average earnings gains raise the expectation they'll continue to deliver high profit growth.

Value stocks are out-of-favor stocks considered bargains based on their book value or liquidation value. They're cheap because they've struggled, but may have better days ahead.

These distinct investment personalities move in cycles, one dominating for a period before being overtaken by the other. And then it starts all over again.

"There was a 'dash to trash' in which the lower-quality stocks that had blown up in 2008 came back the most in 2009," says Tom Forester, founder and portfolio manager of the $102 million Forester Value Fund, up 20 percent over the past 12 months. "But growth valuations got quite stretched, especially with the tech run-up, and I think you'll see the value guys do better than growth this year."

Over the past 12 months, large-cap growth mutual funds are up 34 percent, while large-cap value funds gained 30 percent, according to Lipper Inc. Meanwhile, small-cap growth funds have risen 39 percent and small-cap value funds are up 43 percent.

All good numbers, though admittedly coming off a low beginning base. Technology was the prime mover in growth, and growth investors expect that party to continue.

"Technology was really good, and I believe it can continue to be good in 2010," predicts Robert Bartolo, portfolio manager of the $20.8 billion T. Rowe Price Growth Stock Fund (PRGFX), up 34 percent over the past 12 months. "The valuations are still very reasonable for even the high-growth companies, the balance sheets are great, and the companies are cash-rich with good cash flow."

Even stocks of high-growth tech firms such as Apple Inc. (APPL) and Google Inc. (GOOG) are, relatively speaking, reasonably priced, Bartolo says. Many companies delayed spending on technology over the past 18 months and will have to update their systems in the coming year to keep up with the competition.

The proliferation of smart phones and wireless data will benefit companies such as Qualcomm Inc. (QCOM), he says, while tower firms such as Crown Castle International Corp. (CCI) and American Tower Corp. (AMT) will prosper as the "landlords" of wireless networks.

Financials hopefully will enjoy a better overall economy and improved consumer confidence as the employment picture brightens, he expects. Invesco Ltd. (IVZ), Charles Schwab Corp. (SCWH), and TD Ameritrade Holding Corp. (AMTD) are good choices, he says. He also owns Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM).

The "no-load" (no sales charge) T. Rowe Price Growth Stock Fund requires a $2,500 minimum initial investment.

"The stuff that works one year tends not to work the next year," says value investor Forester, whose only real concern in value stocks is that he's not so sure bank problems have been solved. "Quality names with lower p/e (price-to-earnings) ratios right now will do well."

In pharmaceuticals that fit in the "quality-at-the-right-price" value category, he likes Pfizer Inc. (PFE), Merck & Co. Inc. (MRK), Bristol Myers Squibb Co. (BMY), and Johnson & Johnson (JNJ). In retailing, lower-priced stores Kohl's Corp. (KSS), Target Corp. (TGT), and Wal-Mart Stores Inc. (WMT) should continue to do well in an environment in which consumers spend their money carefully.

He puts giant techs Microsoft Corp. (MSFT), Oracle Corp. (ORCL), and Hewlett-Packard Co. (HPQ) in the value category price-wise and expects further price gains ahead.

The no-load Forester Value Fund requires a $2,500 minimum initial investment.

"People are going to look at what the value benchmark did and compare it to the growth benchmark," contends Forester. "The value benchmark is going to get hit because of the banks, and the tech companies have already had a run-up, but I give the edge to value."

Those firms that could obtain financing have done fine and those that couldn't continue to have trouble this year, he says. He predicts the overall market will be up 5 percent to 10 percent this year but it's going to be an "all-over-the-place" kind of year.

"A lot has been happening in value stocks, which are typically dominated by financials," says Paul Nolte, managing director at Dearborn Partners, in Chicago. "In banking these days, the hard part is determining what banks own in terms of what's on their balance sheets and what's off them."

Goldman Sachs is included in his firm's portfolio because it is definitely going to be a survivor, Nolte points out. Visa Inc. (V) and Aflac Inc. (AFL) are other financial firms worth a good look, he believes.

"As we start to see some semblance of earnings recovery, growth will be the better place to be," Nolte predicts. "So as you look at companies you want to see top-line growth, not everything coming from just cost-cutting."

In growth, Nolte likes Google, Cisco Systems Inc. (CSCO), General Dynamics Corp. (GD), Qualcomm Inc. (QCOM), and IBM Corp. (IBM).

During the 1990s, technology was the rage in a growth-dominated market and value took a back seat, Nolte says. "But then value did very well starting in 2000 up until 2003-2004," he adds. "Now, it's back to growth again."

Maybe so, but value investors have no intention of conceding just yet.