One of the topics we discuss in detail in our teleseminar courses is Value Stocks vs. Growth stocks. Value stocks are typically priced cheaper relative to their earnings and book value while growth stocks are generally higher priced relative to their earnings and book value. Additionally, value stocks tend to have higher dividends, while growth stocks pay little if any dividends. At certain times, depending on the economy, growth stocks outperform value stocks and vice versa, therefore, it is important to be invested in the right category at the right time. Alternatively, investing in both value and growth stocks insures that you will always be at least partially in the right category. Of course, as we have seen recently, there are times when neither growth nor value stocks perform well.
With the recent stock market correction, the line between value and growth stock categories has narrowed, because so many stocks are trading at low prices relative to their earnings. Follow the link below to read an excellent article in Smart Money about Growth and Value stock categories. This is an area that is important for all investors in the stock market to understand.
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