Growth, Value Share: Investing in What?

SEBI divides the shares into Large Cap. Stocks, Medium Enterprise Shares and Small Company Stocks based on their stock market value. Analysts divide these stocks into Growth Stocks and Value Stocks. Let us look at these two types of stocks in detail. Development stocks ..! Growth stock is the stock of a company that has consistently given good returns. These companies often do not pay high dividends to investors. The reason is that the main purpose of these companies is to keep their share prices constantly rising. These companies will be reinvesting their profits for its growth, expansion and technological facility. Those who invest in these stocks invest with the intention that this stock will yield more returns than any other stock in the company-based sector, rather than the stock market. Thus, the price of these stocks will be subject to higher inflation. These companies are often hit in the press because of their rapid expansion. Then the share price will fluctuate. Growth style investment is also known as momentum strategy. This is to chase stock price trends. Investing in stocks that are already performing well in the expectation that they will perform well in the future will also come in growth style. Growth stocks are driven by the rise of the stock market. Investors who want a capital increase in the long run focus on this method. Investors are investing in growth stocks if the company achieves good growth in the future despite the high rating and stock ratio. Value stocks The price of these company shares is available cheaply. These companies are basically very strong. Due to stock market environment or company related issues the share price is currently falling and trading at a cheaper price. For example, the share price plummeted during accusations that Nestl's Magee contained too much pesticide. But the share price soon recovered as the company was fundamentally strong. These value companies often divide profits into dividends for investors. Moreover, the share price is not subject to high volatility. Benjamin Graham, Father of Value Investing, said, “Buy shares in a company just as you would buy shares in a grocery store; Don't buy stocks like you buy perfumes. ” That is, when we buy vegetables and groceries we place more emphasis on the health of our family and examine its quality and then ask for its price. Because we value the health of our family, but we do not value the quality and price of the perfume when we buy it. We will only notice its scent and attractiveness. Benjamin Graham tells us how to explore and buy groceries as well as explore stocks without succumbing to the tempting news about stocks. How to determine the value role? Good business, efficient management and a fundamentally strong company would now be underestimated. Thus, the value of its share will now be cheaper. All equity investors know about PE Ratio. It is the ratio between the price of the stock and its return. Let us see how to choose a value share based on this P / E ratio. For example, a person buys a share of A for 100 rupees. Assume that the return on this stock investment is Rs.20. The investor pays 5 times as much as the return on the stock. The lower the BE ratio, the higher the return on equity investment. Let’s take two company shares. Both A and E stocks are trading at the same price i.e. Rs. The PE ratio of stock A is 10 and the BE ratio of stock E is 14. Here’s a look at investing, since stock rating is attractive. Further, the PE ratio of the stock should be compared with the PE ratio of the sector. For example, the PE ratio of Infosys is 35. The average PE ratio of the IT sector is 41. Since Infosys PE is low compared to the industry PE, it has value and attractive share. Supports the value investment style of renowned investor Warren Buffett. He talks about value investing ‘the price of the stock is the money you pay. Its value is what you get. If a stock is selected for investment in the value investing system, the return on the stock price will be lower if the company's earnings expectation is lower. Margin of safety is very high in value investing. Margin of Safety is when a stock chooses to invest its next year's fair price. The price will be reduced by 15-20 per cent from this price and the purchase price will be fixed now. It would be safer to buy at such a low price. Furthermore, value-based equity investing can protect one's portfolio from falling further during periods of stock market downturn. Development role? Value share? Growth stock, value stock whatever it is invested in let it be a long term investment. Next that company needs to be fundamentally strong. Many times, investors mistakenly choose penny stocks as value stocks that have fallen in price without a basic strength. Be very careful in this matter. Do not forget to seek the help of an expert if you are in doubt. It is important to note the price trend of the stock before investing. It is very risky to invest without knowing this. When it comes to stock market investing it can help you achieve your financial goals in the long run as well as add wealth. In that sense, it is not wrong to invest in Growth stocks and value stocks. Those who want to wait a long time and see good returns should invest more in value stocks. Others can attend and invest. Both of these investments are profitable at different levels of the stock market. So, as an investor is it a growth role? Value share? No need to worry too much about. Due to some issues the value was part of the potential to become part of the growth. Similarly, growth share is likely to become value share due to issues. In general, a stock investment mix is ​​likely to yield good returns if both are equal. Nifty 50 Value 20 Index The Nifty 50 Value 20 Index (NIFTY50 Value 20 Index) is a selection of 20 stocks out of the 50 companies listed on the Nifty Index. . Coal India, ONGC, Powercrete, Sun Pharma, JSW Steel, UPL, Hero MotoCorp, Bajaj Auto, Grossim Industries, Wipro, HU, L, I The index includes DTC, L&T, HDL Tech, Infosys, Tech Mahindra, Indus Ind Bank, Hindalco, TCS and NTPC.

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R K G Capital Gains

Certified Equity Research Analyst, Technical Analyst , Investor , Trader , Trainer and Mentor

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