Today on the Finance Flash Go! podcast, we’re going to cover growth versus value stocks.
Growth stocks are stocks in companies that are estimated to have the potential to outperform the overall market over time because of their future potential. Value stocks are stocks in companies that are currently trading below what people think they are really worth and will thus in theory provide a superior return.
What are growth stocks?
Growth stocks are considered by analysts to have the potential to outperform either the overall markets or else a specific subsegment of them. They can be found in small, mid or large cap sectors and really only retain this status until analysts feel that they have achieved their potential. Growth stocks are expected to outperform the overall market over time because of their future potential.
What are value stocks?
Value stocks are usually larger, well-established companies that are trading below the price that analysts feel the stock is worth. Value stocks are thought to trade below what they are really worth and will thus may theoretically provide a superior return.
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