Growth vs. Value Investing
To gain a better understanding of growth and value investing, let’s take a moment to discuss the differences between the two. Growth Investing — Growth stocks are those that have seen impressive gains in recent years and have been proven to be leaders in their sectors. Mutual fund managers often choose growth stocks for their clients because they’re considered to be safe bets for continuing to deliver high levels of profit growth, although it’s important to realize there are no guarantees. Generally, growth companies are those that have held a prominent place in the market for some time; but they may also be new, emerging growth companies that are bringing in large profits at the beginning of their business life. Growth stocks tend to be higher priced, more volatile, and characteristic of higher earnings than the rest of the market. Value Investing — Another approach to buying and selling stocks is value investing. This involves looking for companies whose stock prices may not necessarily reflect their value. The idea is that by getting in on the ground floor or after a good company has experienced a serious setback, investors have a better chance of seeing an impressive return with value stocks. This being said, the market price for certain stocks that show promise may actually be accurate, in which case a large return will likely not materialize.
Which Approach to Take?
Because growth and value investing are so different from one another, there doesn’t tend to be a lot of overlap. This is actually good for the investor, however, as it allows for both approaches to be utilized at the same time. Making use of growth investing and value investing can be an effective way to diversify your portfolio. Diversification does not ensure a profit or protect against a loss.
Representative is registered with and offers only securities and advisory services through PlanMember Securities Corporation, a registered broker/dealer, investment advisor and member FINRA/SIPC. 6187 Carpinteria Avenue, Carpinteria CA. 93013, (800) 874-6910. Randall Wealth Management Group and PlanMember Securities Corporation are independently owned and operated. PSEC is not responsible or liable for ancillary products or services offered by Randall Wealth Management Group or this representative. CA Insurance License: #0727953.
This newsletter was prepared by Integrated Concepts Group, Inc. The opinions expressed in this newsletter are for general information only and are not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. The views expressed are those of the author and may not necessarily reflect those held by PlanMember Securities Corporation. Material presented is believed to be from a reliable sources and PSEC makes no representation as to it accuracy or completeness.