Risk and Return of Value Stocks

A value stock is normally perceived to be riskier than a growth stock. This can be related to the skeptical attitude that the market has towards value stocks. For investing in value stock to become profitable, the stock market must change the way it perceives the company issuing the value stock, which is perceived riskier than a growth entity developing. As a result of this, there are possibilities that a value stock willusually have a higher long-term return than a growth stock due to the underlying risk.

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