U.S. Investment
The Difference Between Growth and Value Stocks
Tom Lydon
A question as old as the stock market itself is, “Should I invest in growth or value stocks?” This question can apply to both global and domestic markets, but I discuss it here because the debate tends to center more on domestic companies.
Growth companies are those that are important to our economic growth, such as technology. If these companies catch on, they’ll sprint right to the front of the line with a cutting-edge product or business model.
Their price-to-earnings ratio (P/E) is often substantially higher than average, but it’s worth it when you think about where the company might be in a few years. The P/E ratio is the valuation ratio of a company’s current share ...
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