June 5, 2012
The following video is part of our "Ask a Fool" series, in which Motley Fool analyst Austin Smith answers questions across the investing universe.
In today's edition, Austin answers one of the most common questions we get at the Fool: What's the difference between a growth and value stock? Austin identifies value stocks as those which are mispriced, or trading to a discount to their intrinsic value. Value investors are buying companies with the expectation that shares will rise to reflect the real value of the company. Meanwhile, growth stocks are those that investors are buying with the expectation of large earnings in the future. There are a few telltale signs covered in the video to help you identify whether you're looking at one type of stock or another. Austin reminds investors that growth and value strategies aren't mutually exclusive and thinks Warren Buffett said it best when he quipped that "growth and value investing are joined at the hip."
If you're looking for one great stock to kick off your portfolio, don't forget to read up on our chief investment officer's Top Stock for 2012. It's an emerging-market retailer that Wall Street is still blind to, and that's a good thing. Click here to read more.
If you'd like to learn about more Foolish investing before jumping in with both feet, don't forget to take a look at our Motley Fool YouTube Channel. There you'll find incredible content for the advanced and beginning investor alike. Watch more here.