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Where to Invest-Value or growth ?


where-to-invest-value-or-growth

Where to Invest-Value or growth 

Where to Invest | Value or growth 

At this time most of us finding problems while selecting stocks to invest for their long-term portfolio, as there are almost all the companies available at very attractive valuations, and finding the best within our purchase range is very important decision for wealth creation. This is an age-old debate that we should go with value or with growth while investing.

What is value investing?

Value investing mean, investing when the stock is under its intrinsic value, the investors find these valued companies after the study of various factors, this concept is giving by the father of value investing 'Benjamin Graham'. The goal of value investing is to find the stocks on lower valuations with high value. Value investing is generally in big established companies that are cheaper today due to any reason, price cheaper but the value is still maintained at the higher side. These companies generally pay dividends to investors as there investment interest. Stocks can be undervalued because of many reasons, in fact, some times none of the reasons is known to drag the stock price in a downward direction, in that case if you invest in that company then you are catching the falling knife and it can be dangerous for you in future.

value-investing

What is Growth Investing?

Growth investing means, buying stocks when investors see faster future growth prospects in the company. These companies mostly available on premium valuations as continuously they deliver growth. Growth stocks can be found in small-cap,mid-cap, as well as in large-cap. These companies do not believe in paying dividends on investments as they deliver high growth to their customers.
They reinvest the earning of the business into the company to become big bigger and biggest. The investor feels comfortable in growth stocks to buy at any price level because investors are highly optimistic that on whatever price they will invest in the company, from there also they will get a significant price hike.

Growth-investing

What is the best to choose between value or growth?

If we go with value investing, then in the current scenario you would be fine with most of the stocks as all the companies are looking attractive and below their intrinsic value but going with all the stocks or some of the stocks can be very dangerous because the stock price can be fall due to various reasons. In falling markets, if you go with value investing then it could be a value trap for you. 
On the other hand, if you go with growth investing then it could be expensive for you because the growth investment principle does not follow the right price investment strategy. Growth investment can be fruitful only if the payoff from growth is greater than the cost of growth.

They individually work for nothing great but together value and growth work great. Peter Lynch is the investor who coined the term GARP(Growth at a reasonable price), most of the investors agreed that alone growth strategy does not work and if we can find the growth generating companies at great valuations then it is the key to long term success and wealth creation.

Keypoint

We should always wait for the opportunity to come while buying the growth stocks at a great price, having good stocks in your portfolio do nothing if you buy them on higher valuations. While if you have already invested in higher valuations then keep accumulating on lower levels for better returns.

ALSO, READ https://bijimoney.blogspot.com/2020/06/Price-Earning-Ratio.html
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Comments

  1. उमेश अग्रवालJuly 16, 2020 at 9:22 PM

    Value or Growth both are the key point of investing, if we count ourself in prsious, we should choose Growth earned investments when these are at lowest rate.

    ReplyDelete
  2. Archana AgrawalJuly 16, 2020 at 9:34 PM

    Very nice blog .

    ReplyDelete
  3. Nirabh AgarwalJuly 17, 2020 at 5:39 AM

    Adorable one..

    ReplyDelete
  4. ayushJuly 17, 2020 at 6:38 PM

    Growth and value both are important aspect... They both go side by side while investing any any stock..

    ReplyDelete
  5. abhayamJuly 17, 2020 at 9:59 PM

    Is there any platform (i.e. website, application etc) to get concrete data of stocks on lower valuations with high value ?

    ReplyDelete
  6. MansiAugust 30, 2020 at 8:58 AM

    Good

    ReplyDelete

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I have started this blog to educate people regarding saving and investment of their hard-earned money wisely to become big, investing decisions play a very important role in our life to meet our retirement expenses and brighten our future.

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