Some consider growth investing and value investing to be diametrically opposed approaches. Value investors seek “value stocks” that trade below their intrinsic value or book value, whereas growth investors—while they do consider a company’s fundamental worth—tend to ignore standard indicators that might show the stock to be overvalued.
While value investors look for stocks that are trading for less than their intrinsic value today—bargain-hunting so to speak—growth investors focus on the future potential of a company, with much less emphasis on the present stock price. Unlike value investors, growth investors may buy stock in companies that are trading higher than their intrinsic value with the assumption that the intrinsic value will grow and ultimately exceed current valuations.
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