Growth Stocks vs. Value Stocks: Which Are Best?
Hint: It’s a trick question.
Deciding between growth stocks and value stocks is an age-old struggle for investors. But what if you could have both?
In my experience, the most profitable stock picks look for strong growth at a fair value.
Before I explain, let’s cover some basic definitions, because most investors don’t actually understand the difference between growth and value stocks.
Growth vs Value Stocks: Definition
First, let’s start by defining growth stocks, since they’re much easier to understand.
Growth Stock Definition
Growth stocks are companies that are expected to have unusually high growth in their future sales and/or earnings.
Investors who buy growth stocks often believe growth companies will deliver strong financial results far into the future as they find an ever-expanding market for their products.
Value Stock Definition
OK, this one is confusing. Value stocks aren’t always undervalued.
It comes down to the fact that the phrase “value stock” can actually mean two different things:
