Growth vs Value Investing — Definitions, Historical Performance, and How to Allocate Your Portfolio
The growth versus value debate is one of investing's most enduring questions. Growth investors chase companies with rapidly expanding revenues and earnings — think technology giants — while value investors seek stocks trading below their intrinsic worth. In February 2026, the contrast is stark: the Vanguard S&P 500 Growth ETF (VOOG) trades at a P/E of 32.38, while the Vanguard S&P 500 Value ETF (VOOV) trades at just 23.87 — a 36% valuation premium for growth stocks. This valuation gap reflects growth's recent dominance. Technology and AI-driven companies have powered the Nasdaq 100 (QQQ at $607.29, P/E 32.65) to extraordinary returns, leaving value-oriented sectors like financials, energy, and utilities seemingly in the dust. But historical data tells a more nuanced story — value has outperformed growth over most long-term periods, and mean reversion has a way of humbling concentrated bets. This guide explains what growth and value investing actually mean, examines their historical performance record, and provides a practical framework for allocating between the two styles.