Growth vs Value Stocks & Investing for Kids & Teens
This video performs a growth vs value stocks comparison in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about growth vs value investing, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- Differences between growth stocks and value stocks
- Differences between growth investing and value investing
- Which is better: growth stocks / investing vs value stocks / investing
Growth vs value stocks: What is the difference between growth stocks and value stocks?
Whereas Value stocks are stocks that appear to be underpriced based on their P/E ratio and how well the company is doing in terms of sales and earnings.
Are there any other differences?
Growth stocks typically do not pay dividends as they try to reinvest their profits to accelerate their growth, whereas value stocks usually pay consistently good dividends.
Growth stocks are usually either new companies or technology companies like Amazon, Facebook, etc.
Whereas value stocks are usually mature, well-established companies like Berkshire Hathaway, Johnson and Johnson, etc.
Growth vs value investing: How are growth investing and value investing different?
Growth investors only look for stocks that have a high potential for capital growth. But value investors invest in stocks they think are undervalued and are therefore a bargain.
Growth investors may not necessarily focus on the current fundamentals of the company, whereas value investors base their decision on fundamentals like sales and profit, dividend payouts, historic growth, company management etc.
Which is better, growth investing or value investing?
On the other hand, value stocks are less risky, as they are stable companies with a proven track record.