What is the value investing and growth investing?

1. What is the value investing and growth investing? What are the differences and relative merits?
Value investing is where investors identified misunderstood companies trading below fair market value and waiting for the market to acknowledge the inefficiency. This means that value investors would seize the opportunity to purchase an undervalued company knowing that, at some point in the future, the market would correct itself. Growth investing is when you invest in companies that have above-average growth characteristics. Investors are willing to pay a premium for companies where their future prospects were above average. Main difference is growth investing is investing in overvalued companies while value investing is investing in undervalued companies. Another difference is that growth investing is fast, you get your value quick. But with value investing, it requires patience. If you look at the business lifecycle graph, you can see that a growth company has more growth but less time while a value company is the opposite. Some relative merits to growth investing is that it placed an emphasis on identifying less-tangible characteristics, which might help predict future success. Investors would invest in technology companies that would have above average earnings early in their business lifecycle. Problems that growth investors face are higher risks and volatility and it’s difficult to predict how well the company will grow in the future. Some relative merits for value investing is that value investors take advantage of devalued assets that others would be afraid to invest in. Characteristics of of value stocks are that they come from companies that are mature and pay dividends to shareholders. Problems that value investors face is that they get below average returns, it takes longer, and investors could buy troubled companies.
2. What are GMO’s main arguments in favor of value investing?
GMO’s main arguments in favoring value investing is that these long term value investments are consistently outperforming growth investments. Finding undervalued investments could mean that there would be higher returns than the market average. Also value stocks represent companies that will be around for a long time. Their stocks would outperform the market average and convey a lower degree of volatility in the long term. In growth investments, sudden momentum changes can cause huge price swings. Value investments are more steady and consistent.

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Money-back guarantee

At homeworkcheg.com, You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with at HomeworkCheg, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages