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Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Monday, August 21, 2006

More on Growth and Value Investing

As stated previously value investing over the very long term has provided excellent returns especially compared to growth. However, if you shrink the time line to 10 years you will see differing results. For example, 1990-2000 large cap stocks performed the best, with large cap growth leading the way at 18.1%. Small growth stocks were the worst at a 14.0% average rate. Large cap value returned 17.5% over this period and small cap value returned 16.1%.

So although a very long time horizon favors value stocks, in this specific case large caps stocks ruled over ten years with large cap growth being the best.

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