Difference between Value Investing, Growth Investing and Garp Investing

I'll be talking about stock picking and how people can identify themselves as Value Investor,Growth Investor or GARP Investor!!

Stock picking is a process where one identifies which stocks he wants to add to his portfolio in order to receive maximum returns and in this process there are maximum chances where one will find some stocks to be performing extremely well and some stocks that are undervalued and may also find some stocks which have given some reasonable and fixed returns over a particular period of time.

Now it depends on the person whether he wants to make quick money, or wants to get some reasonable returns with minimum losses or whether he wants to generate wealth by being in the market for a long time.

So, depending on the above mentioned things, one must be either going for Value Investing or Growth Investing or Garp Investing.

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Now you must be thinking what all are these forms of investing!!

So let's break it down into simple steps -

(i) Value Investing - It is basically investing in a particular company's business that is analysing and understanding what work does company do and how that particular industry will grow in future. This type of investing is basically long-term investing and therefore, wealth is generated over years.

(ii)Growth Investing - This type of investing is one where person seeing the continuous growth of the company and also seeing the rising share price of that company invests in it. The person investing in such company sees that company has been performing really well in previous years and may perform in a similar manner in upcoming years, thereby, rewarding them with great returns.

(iii) GARP Investing - This investing is basically finding a business that is performing decently and it's stock is also available on a reasonable price. This type of investing usually rewards investors with a stable rate of return and that too minimum downside risks.

In the end, it is on the person what he/she wants but one thing should be clear in mind that a person who stays in the market for a long run while investing in such a manner that he faces minimum losses earns more and ultimately generates wealth. For example, we all know like Rakesh Jhunjhunwala, Warren Buffet and many more. So make informed decisions and start your journey of investing!!

Source - mymoneysage.in