📈 Value vs. Growth

Which should you be buying right now?

Value vs. Growth Investing

Two styles of trading stocks are value and growth investing.

Value refers to purchasing companies that are perceived to be undervalued vs. their performance and book value. This is the style of investing that Warren Buffett made famous.

On the other hand, growth investing is geared towards purchasing companies that have potential to grow exponentially in the future, so you are buying the stock now and hoping it outperforms the expectations that are currently priced into the market.

Money Flow

Right now, we are seeing money flow into value stocks over growth stocks.

You can see this by comparing the performance of VUG to VTV (growth and value ETFs respectively).

You can see that VUG / VTV is in decline. This means that VTV (value stocks) is outperforming VUG (growth stocks).

When we see strong bull markets, we see the opposite happening.

This is something to keep an eye on and it furthers the notion we have been talking about for a while now of tech underperforming.

I go into more detail on what this means for the market in this video: