Growth Investing vs Value Investing

Growth Investing vs Value Investing

Core Facts

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When you invest for growth, you are usually seeking capital appreciation over the long term. You will most likely choose investments that you feel will exhibit a faster-than-average increase in share price over the coming years. Growth stocks have the potential to outperform slower-growing investments, like income stocks, because gains are typically reinvested in the company to accomplish further growth instead of distributed to shareholders as a dividend. Growth stocks may be volatile. One way to minimize the impact of that volatility on your portfolio is to buy shares of a growth mutual fund. You'll enjoy immediate diversification (though diversification alone cannot ensure a profit or ensure against a loss). And an actively-managed mutual fund also offers professional management expertise.

A value investor looks for bargains, and chooses investments that have low prices in relation to such factors as earnings, sales, net current assets, and the book value of the issuing companies. A value investor may turn down a popular blue chip stock because the price per share is too high, although the issuing company is stable and has a record of steady growth. Instead, the value investor seeks to buy stock of a solid company that is briefly out of favor or bargain priced for some other reason. In doing so, the value investor predicts that the share price will eventually return to a higher level when the stock comes back into favor, and the market drives the stock price back up. A mutual fund manager may focus on growth investing, value investing, or some combination.

Note: Before investing in a mutual fund, carefully consider its investment objectives, risks, fees, and expenses, which are included in the prospectus available from the fund. Read it carefully before investing.


Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC


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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website:

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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