Lingo every investor should know
The world according to GARP
Garp was the title character in a best-selling book by John Irving. Growth at a reasonable price, or GARP, examines a company's books to give investors an edge. GARP, a strategy often credited to Fidelity guru Peter Lynch, is a way of finding bargain-priced stocks.
So-called growth companies are those expected to expand rapidly, often in emerging fields such as new technologies. But their shares are often pricey. GARP investors seek out value stocks -- those of growing companies whose stock valuations are relative bargains.
"With growth investing, you're typically looking at companies with real high earnings growth, and in value investing, you are looking at companies that typically don't have very high valuations," says Rimel. "But GARP investing kind of employs both of those."