Growth investing focuses on companies expected to grow at an above-average rate compared to others in the market. For instance, if you invest $1,000 in a growth stock that increases by 20% in a year, that’s $200 in gains, making your total investment worth $1,200. Value investing, on the other hand, targets undervalued companies hoping their stock price will rise over time. If you find a stock priced at $50 with an intrinsic value of $80, buying it at a discount could yield significant returns when it reaches its true value. Both strategies have their merits and risks, so choosing one depends on your investment style and goals.

Growth investing is an investment strategy focused on stocks expected to grow at an above-average rate relative to the overall market, while value investing involves buying undervalued stocks that are believed to be trading for less than their intrinsic value. Investors use performance indicators, like earnings growth or price-to-earnings ratio, to determine potential investments in each category.