Video Lesson
Prefer watching? This video covers the key concepts from this article.
Watch the video
Prefer watching? This video covers the key concepts from this article.
Two Approaches to Stock Selection
Growth Investing
Focus on companies with above-average revenue and earnings growth. These stocks often trade at premium valuations with higher P/E ratios.
Value Investing
Seek undervalued stocks trading below intrinsic value. Value investors look for low P/E, P/B ratios and margin of safety.
Which Is Better?
Neither approach is universally superior. Growth outperforms in bull markets while value tends to shine during recoveries and periods of uncertainty.