Value Vs. Growth Trading Strategy: Evaluating the Best Approach through Backtesting and Performance Analysis

Investors have a variety of options when it comes to investing strategies — Bond vs. Equity, Passive vs. Active, and Value vs. Growth strategy. Here, we focus on the two most popular strategies — Growth Investing and Value Investing. The two methods differ in many ways. Let’s find out: what is best – value or growth? We backtest both growth and value stocks and also make a value and growth rotation strategy that are switching between the two strategies .

Value vs. Growth trading strategy is one of the most popular comparisons in the investing world. Value strategy prioritizes buying undervalued stocks with strong fundamentals, with the expectation that the market will eventually recognize their value. Growth strategy, on the other hand, focuses on buying stocks of companies that have strong potential for future growth, regardless of their current valuation.

In this post, we take a look at Value vs. Growth trading strategy. We make several backtests to find out what is best, growth or value stocks.

We further show you a value and growth rotation strategy and system that beats buy and hold.