Do you have your 24? Part 4

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November 16, 2018
Do you have your 24? Part 4

Image Copyright Ted Grussing Photography – Used with permission

In recent past segments, we discussed the different fears that currently abound in the media about when the next bear market will begin and how the number ‘24’ can help you prepare for the hard times.

The 24 refers to the 24 asset classes which go into having a diversified portfolio. Today we’re continuing our discussion of the bundle of 24 asset classes and we are going to discuss the difference between Growth and Value companies.

  • Typically, Growth companies re-invest most of their earnings back into the company. Their focus is on growing the company bigger and faster.
  • Alternatively, value companies are usually more settled and successful companies that are paying dividends to investors.

However, this is not always the case. You may find some value companies may be struggling and therefore are not as expensive to invest in as they once were. And here at CMW we call that ‘being on sale’!

Here are a few real company examples in each of our six asset classes we’ve learned so far:

  • An example of a Large growth company would be Apple
  • A Large value company would be Exxon (Think of what oil prices have done in the last few years. Gone down. So that means they’re not making the profits they once were.)
  • A Mid-size growth example is one of our favorites…Dollar General
  • And a Mid-value example is Coach
  • An example of a Small growth company is WD-40
  • And Small value would be Jet Blue

Warren Buffet is known as one of the best value investors ever. He just has a knack for knowing when something struggling will turn around and do well. So if you have value companies in your portfolio you’re in company with Warren Buffet!

Next week we will continue our discussion on the 24 Asset Classes.

Until then, have a great weekend!