Growth stocks outperform value stocks over the long term

N Beneda ()
Additional contact information
N Beneda: University of North Dakota College of Business and Public Administration

Journal of Asset Management, 2002, vol. 3, issue 2, No 3, 112-123

Abstract: Abstract Previous studies have generally found that returns on growth stocks, or stocks with high price-to-earnings (P/E) ratios, often lag behind those of value stocks, or stocks with low-P/E ratios. This study examines the long-term (up to 18 years) performance of growth stocks versus value stocks when a buy-and-hold strategy is adhered to. The study examines the performance of growth versus value stocks of portfolios created during the period 1983–7. The findings of this study indicate that the long-term performance (14+ years) of growth stocks is higher than the long-term performance of value stocks for portfolios created during the years included in this study. After only five years, however, the growth stocks lagged behind the value stocks. These results tend to support the efficient market hypothesis.

Keywords: growth stocks; value stocks; stock performance; price-earnings ratio; efficient market hypothesis; earnings growth (search for similar items in EconPapers)
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1057/palgrave.jam.2240070 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:assmgt:v:3:y:2002:i:2:d:10.1057_palgrave.jam.2240070

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41260

DOI: 10.1057/palgrave.jam.2240070

Access Statistics for this article

Journal of Asset Management is currently edited by Marielle de Jong and Dan diBartolomeo

More articles in Journal of Asset Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().