One question you can ask yourself before you invest in a company: why do I think the value will increase and provide a good return on my investment?

One reason is because the company is poised to grow at a rate above the overall market. These are called growth stocks.

Another reason is because the company is valued lower than it should be right now based upon a fundamental analysis of its fair market value. These are called value stocks.

Growth

With a growth stock, the current price may already be high due to strong demand, because people think the stock will be worth much more in the future. That is the risk you are taking, because if the stock does not outperform the overall market, you are now behind.

Having a good knowledge of the market in which a growth stock company operates is very helpful. There may be market disruptions (AI anyone?) that lead to outsized expected growth. Look at Nvidia’s 5 year chart. Tell me when everybody figured out Nvidia’s chips were amazing for AI processing.

Or Amazon during the pandemic. Look at this chart and tell me when everybody figured out that if you can’t go to the store to buy things, you are going to need to order it online.

These companies were sitting in a market that, for whatever reason, had amazing growth potential. The companies were able to use their core strengths to jump ahead of the overall economy in terms of value creation speed.

Value

As mentioned, value stocks are those that, after lots of research into the company and market itself, you think the price of the stock should be higher than it is right now. And you expect that stock price to rise as everybody else realizes all the amazing things you already realized.

The stock could have been beaten down by some newsworthy event, which caused everybody to panic sell. These stocks are trading nowhere near their high marks. However, if you think the stock will get back up to that high water mark, you may have found a good value stock.

Now, determining which stocks that have suddenly dropped in value are actually value stocks takes research. You don’t want to “catch a falling knife” by the blade and end up bloody. You want to be able to catch the handle! Does the company have enough cash to weather any storm? Are creditors piling up? Is the photograph printing market shrinking incredibly fast and the company is not making the right decisions? Back to that fundamental analysis of the company itself - if you look at the financials and are impressed with the leadership's team ability to navigate that quick drop in stock value, then you found a winner!

Warren Buffet seems to think United Health is a value stock. As you can see, the stock is about half of its initial value. Buffet is in this for the long term and is hoping that his research is correct in terms of UnitedHealth potentially doubling back up to its previous value faster than the market as a whole would double. Either that, or he hopes his clout is enough to make it a value stock in that more people will invest just because he did.

Holy cow done

That about wraps up the difference between these two types of stocks. Many stocks are a blend of the two, also. But seeing the extremes helps with understanding this way to differentiate stocks. Yes, there are more specifics that I didn't fully get into. And yes I am trying to be as approachable as possible with the topic. Hopefully this helped you!

Can you find an example of a potential value stock out in the world currently? How about a potential growth stock?

Any interest in forming an investment club?

We would meet regularly (TBD), learn techniques from each other, pass on knowledge and experience, and present our individual analysis.

The chair would keep people on track in between meetings, encouraging the hard work of spending your own time researching duds in the hopes that one of us finds a potential gem for us all to enjoy.

Theoretically, we would want to research company stocks that are easy for all to buy, so I would be interested in a group based upon major US indices. However, this thread could potentially be used by others to form their own group buying from other markets.

Edit: alright, I'm sending direct messages to those who expressed interest in wanting to contribute. Those who expressed interest in learning will potentially be able to learn with however the group decides to communicate to Tildes.

If you are interested in participating, you can leave a comment here or send me a message for now. Thanks!

I know most here are US-based, but I thought I'd give this a shot.

I've been running a pretty straightforward ETF portfolio through Ergo in Germany for a while now. Here's my current breakdown:

• 25% in iShares MSCI EM IMI ESG Screen UCITS ETF
• 25% in iShares MSCI Europe ESG Enhanced UCITS ETF
• 50% in iShares MSCI World SRI UCITS ETF EUR

I've recently freed up an extra €500 monthly that I'm looking to invest and am wondering if it would make sense to just bump up my monthly contribution from €1,000 to €1,500 while keeping the same allocation percentages, or should I consider doing something different with this extra cash?

For context, I've got my emergency fund covered (one year's expenses) and no debt to worry about.

I look forward to hearing your thoughts.

Just curious since the recent DeepSeek panic.

What do you like? Companies/ETFs?

What do you do? Buy and hold/Trade/Options (Calls/puts, LEAPs, spreads)?

What areas do you think will see massive change (gain/loss)?

Pretty sure this is my first or second topic post, so apologies if the opener is too short.

A very newbie question to which I'm having a hard time finding a clear answer (and I don't want to read a dissertation on how the stock market works).

I'm planning to sell my FZROX (FIDELITY ZERO TOTAL MARKET INDEX FUND) shares.
Fidelity states "This trade will be completed at the next available price.".

Does this mean the estimated value could be much lower than it currently is when it "sells"?

e.g. Currently priced at $10,000 when I put in the order to sell, but sold on next pricing when value drops to $7,000 because market.

I understand how distributing bond etfs could work, you get part of the coupons when the etf distributes profits, which compensates somewhat for the price changes of the etf. Interest rates would affect the price of the etf but that would be partly compensated by the distribution.

But how does this work on accumulating etfs? If the profits are always reinvested in the fund, shouldn't the price of the fund always go up? Assuming all/most bonds dont default, interest rates would affect the price but that would be compensated by the reinvested profits?

I am missing something here, dont see the point of a bond etf if the price can change so much.

Do you expect a Fed rate hike, pause, or rate cut on June 14?

I personally believe the Fed will surprise the market with another rate hike because although CPI has cooled, core PCE has remained sticky and the Fed doesn’t want inflation to rear its ugly head at all costs.

According to the CNN Fear & Greed Index we are at “extreme greed” levels not seen since February 3rd, which also coincided with a temporary market top.

This leads me to believe the market will begin to fall over the next few weeks until we hit “fear” or “extreme fear” levels again around July.

Lately I've been thinking about withdrawing most if not all my money off the bank and investing in a safe box, but I'm not sure how wise of a decision that is. How does everyone here go about that? Do you keep your money in the bank? Do you have a safe box at home? Why one over the other? Do you invest some of it, say in things like cryptocurrencies/stocks? What would you recommend or advice someone to do in regards to this if you could?

Hi Friends,

I'm in the (very) early stages of creating a financial endowment fund for a small non-profit community organization I help out with. I feel they're a good fit for such an investment vehicle: their current revenue stream fluctuates a bit and many of their events rely heavily on attendance fees for funding, which is unrealistic when they attempt to cater to lower-income demographics. However, they have a relatively wealthy patronage that tends to remain involved for years or decades, and I believe they have the institutional stability to operate more complex financial instruments.

I pitched the idea of an endowment at a high level to the Chairwoman last week, and the Board is interested in moving forward. We haven't decided how exactly we want to structure the endowment yet: restricted endowment, quasi-endowment, etc. We also haven't determined exactly how much money we should fundraise for a principal investment, what our portfolio spread should look like, and how much of the annual interest we can afford to spend. (I have estimates, but they're not final.) I'm particularly interested in resources that can help the institution plan for inevitable economic downturns.

Has anyone here done this kind of work before? If so, would you be willing to chat about some of the nuances of organizing it, and/or do you have recommendations on reading material to help with the creation and maintenance of such a fund? We plan to receive consultations from an accountant and a lawyer, but I don't have much formal background in finance and would welcome any experience, advice, warnings, or external resources Tildesians can offer.

Thanks,
Atvelonis

For example Vanguard Russell 2000 Growth ETF shows a pe ratio of 19.5 on it's portfolio page, but etf.com (which reportedly calculates PE ratio in the "logical" method we probably all think of) says it's 236.89.

There is also the russel 2000 etf, which shows 14.3 on vanguard and 43.63 on etf.com (I saw no clear indication on the vanguard website they are removing losing companies), ishares does say that for it's etf.

I want to know the PE ratio because economic bubbles (like the dot comm bubble and japan stock market bubble) were characterized by very high pe ratio, and there is historical evidence low pe performs better (probably because of the optimism bias).

I can use etf.com, but would like another source to validate etf.com is reporting correctly .