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.