In the world of investing, there are two main stock categories that often become the topic of discussion among investors: growth stocks and value stocks. Understanding the difference between growth and value stocks is crucial for any investor looking to build a diversified portfolio that aligns with their investment goals and risk tolerance.
What are Growth Stocks?
Growth stocks represent companies that exhibit signs of above-average expansion. These firms reinvest their earnings into their business, and they are often characterized by high price-to-earnings (P/E) ratios and high price-to-book (P/B) ratios. Investors...