We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is Growth at a Reasonable Price?

Malcolm Tatum
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Also known as GARP, growth at a reasonable price is a strategy that seeks to combine elements of value investing and growth investing into one viable approach. When successful, this strategy makes it possible to identify investment opportunities that fit a somewhat narrow criterion, acquire those securities, and increase the chances for earning a significant return from the investment activity. The idea is to dispense with the more extreme aspects of both growth and value investing and use the basic principles to generate the best chances for returns while keeping the level of risk reasonably low.

With growth at a reasonable price, the idea is to identify businesses which are exhibiting growth patterns that are somewhat more pronounced than the general marker levels. This particular aspect of growth investing is then qualified with the current valuation of the securities issued by those same companies, a process that brings to bear a basic of the value investing process on the investor’s approach. Ideally, this decision to use a growth at a reasonable price approach yields the identification of stocks with a solid growth-oriented nature that also possess relatively low price to earning ratios that the investor finds favorable.

Assuming that the securities possess the traits necessary to qualify for this growth at a reasonable price strategy and do perform in a manner consistent with the projections of the investor, the chances of earning a significant return over time are very good. At the same time, this strategy can also be used effectively with investments that are intended to be held for a shorter period of time, even for a single calendar year. The trick is to determine how and at what pace the growth will take place, when that growth will begin to level off, and at what point the investor needs to sell the securities in order to maximize the return.

As with most types of investment strategies, growth at a reasonable price is not a foolproof approach. In order for the strategy to work, investors must evaluate options closely. There is not currently any set process for assessing the viability of any investment opportunity, other than the broad concept of combining basics of both growth and value investing into a single approach. This means that investors must still take the time to use all available data to project the future movement of the option and determine if the proposed growth rate will lead to a desirable end. If not, then the investor would do well to abandon the security and seek opportunities with other options found in the marketplace.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum , Writer
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Discussion Comments

Malcolm Tatum

Malcolm Tatum

Writer

Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.