In general, when interest rates rise, the prices of growth stocks tend to underperform the prices of value stocks. This is because as interest rates increase, it becomes more expensive for companies to borrow money, and investors prefer to invest in companies that are seen as being more financially stable. Growth stocks are typically more […]
Why Do Growth Stocks Underperform When Interest Rates Rise
Investors tend to shift their investment focus towards value stocks when interest rates rise. This is because value stocks typically offer a higher dividend yield and are perceived as being less risky than growth stocks. Growth stocks are companies that are expected to experience rapid growth in earnings and revenue. They typically have higher valuations […]
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Why Are Growth Stocks Sensitive To Interest Rates
Growth stocks are companies that are expected to experience higher than average growth in revenues and earnings. They are often characterized by high price-to-earnings (P/E) ratios and are considered to be more risky than value stocks. One reason why growth stocks are sensitive to interest rates is because a higher interest rate environment can make […]
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18 Min
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