Growth investing prioritises expansion โ revenue, users, market share โ often at the expense of current profits or dividends. Investors accept richer valuations expecting future earnings to justify them.
Growth strategies can outperform in low-rate, expansive environments and underperform when rates rise or growth expectations reset. Time horizon and stomach for drawdowns both matter.
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Open Decision Lab โFrequently asked questions
Growth or value investing?
Neither wins forever. Long-term returns for the two styles are surprisingly close; the ride is very different. Many investors hold both via broad index funds.