Comparison: Growth vs Value Stocks & Investing – A Simple Explanation for Kids

Growth vs Value Stocks & Investing: A Simple Explanation for Beginners

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.

Comparison Growth vs Value Stocks and Investing - A Simple Explanation for Kids
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Suitable for students from grade levels:

  • Elementary School
  • Middle School
  • High School

The topics covered are:

Growth vs value stocks: What is the difference between growth stocks and value stocks?

Comparison Growth vs Value Investing and Stocks for Kids
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Growth stocks are stocks that appear to be overpriced because of their high P/E ratios, but are expected to grow their sales and profits at a much faster rate than the market average.

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.

You may also like:  Infographic: What are Stocks?

Whereas value stocks are usually mature, well-established companies like Berkshire Hathaway, Johnson and Johnson, etc.

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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?

Growth vs Value Stocks and Investing - Which is Better for You
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Growth stocks are usually riskier investments, as their sales and profit growth may not live up to the market expectations.

On the other hand, value stocks are less risky, as they are stable companies with a proven track record.

Generally, growth investing is preferable in a bull market, and value investing can be profitable in a bear market.

Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens

Podcast: Growth vs Value Stocks & Investing Comparison

Growth vs Value Stocks and Investing
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