Growth over Value

Hi Friends,

There has been a lot of debate over the years of which type of investing is better - growth investments or value investments.

As a quick definition, growth stocks are growing companies with expanding fundamentals which favor leverage and investment over stability and net profit, while value stocks are "cheap" compared to other like sized companies, have stable balance sheets with less debt and tend to have steady or declining net profits.

In market corrections, value companies tend to do better as they have better fundamentals and more wiggle room from their conseravite policies, while growth companies will see their stocks decline at a much faster rate, in general. In strong markets, growth stocks will usually outperform as they are more aggressive and better positioned for economic expansion.

Since the stock market tends to go up more than down, the fact is that growth stocks have been doing much better over the last 20 years. While it is the case across all growth stocks, I have been particularly surprised by how great mega cap growth stocks have performed, and here is one of my holdings:

In general, a mega cap company will lag a small cap company when the markets are up given small cap gives you more risk exposure and mega cap is more stable, however, mega cap has been particularly strong, so much so that it is almost not worth the extra risk to get the small and mid cap growth stock exposure over the mega and large cap growth stock exposure. Pretty surprising and goes to show that these large companies continue to be well run and stay in favor with the community (Apple, Amazon, Alphabet, etc).

Thanks for coming by,
Brian

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