From the course: Understanding Capital Markets

Unlock this course with a free trial

Join today to access over 24,900 courses taught by industry experts.

Value and growth stocks

Value and growth stocks

From the course: Understanding Capital Markets

Start my 1-month free trial Buy for my team

Value and growth stocks

“

- [Instructor] There are two basic types of stocks that every investor can choose from when building the stock section of their portfolio: value companies and growth companies. Value companies are companies whose stocks trade at a modest price relative to the level of profits. Basically, they're cheap compared to how much money they earn. These types of companies are usually firms that are mature and they're more stable. They're in industries that aren't necessarily growing quickly. Think railroad stocks, utility stocks, maybe industrial equipment makers, energy providers, et cetera. Those are all often considered value stocks. On the other side of the coin, we also have to consider what we call growth companies. These are companies that are typically fast growing, but they might have lower levels of profits, and they are frequently relatively expensive compared to their earnings. Stocks in this category would often include new technology industries like information technology…

Contents