When it comes to investing, one of the fundamental decisions you need to make is whether to focus on value or growth stocks. Both strategies have their merits, but understanding the differences between them can help you make informed investment decisions.

Value Investing: Value investors look for stocks that are currently trading at a price below their intrinsic value. They believe that the market sometimes undervalues certain stocks, providing an opportunity to buy them at a discount. Value stocks usually have stable earnings and pay dividends, making them attractive for long-term investors.

Growth Investing: On the other hand, growth investors seek out companies that have the potential for high earnings growth in the future. They focus on stocks of companies that are expanding rapidly or disrupting industries with innovative products or services. While growth stocks may be more expensive compared to their current earnings, investors are betting on their future potential.

Choosing between value and growth investing ultimately depends on your investment goals and risk tolerance. It may also be wise to diversify your portfolio by incorporating both strategies to mitigate risk and capitalize on different opportunities.