Value Investment Using Stock Index
Portfolio management has been separated into the value investment approach, where managers select for their portfolios those assets that are cheaper according to their stock ratios, and growth management, which is based on the potentiality of the company. The Russell index segregate in their composition the stocks that are classified in one category to another. This study analyzes the profitability of the Russell value and growth indexes from 1979 to the present day. The study shows that value investment presents a better relation between profitability and risk which should be justified by ratios level and by the market’s consideration.
KeywordsValue investment Russell index Market efficiency Stock market Enterprise value
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