Why Growth Investing is Harder Than You Think

Excess Returns

Growth investing has seemed easy in the past decade. Growth stocks have easily outpaced both value stocks and the market, which has led to great performance for many growth strategies. But it likely won't always be this easy. Over the long-term, growth stocks as a whole have trailed the market, and successful growth investors have had to identify a small group of stocks that perform well in a universe that typically does not.

In this episode, we look at some of the realities of growth investing.

We discuss:

- Why growth investing is about finding diamonds in the rough

- How difficult it can be to hold the great growth stocks through the severe ups and downs they typically experience

- Why investors desire to find the next great growth stock can lead to overvaluation within the space

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

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