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What is the Consumer Price Index (CPI)?

What is the Consumer Price Index(CPI)? The Consumer Price Index (CPI) is a measure of the change in prices paid by consumers for a basket of goods and services. It is one of the most widely followed economic indicators, and it is used by investors to gauge inflation and make investment decisions. How is the CPI calculated? The CPI is calculated by the Bureau of Labor Statistics (BLS). The BLS surveys households across the United States to collect data on the prices they pay for goods and services. This data is then used to create a "basket" of goods and services that represents the spending habits of the average American household. The BLS calculates the CPI by comparing the prices in the basket of goods and services in a given month to the prices in the same basket of goods and services in a base year. The base year is usually 2000. How does the CPI affect investing? The CPI is an important indicator of inflation. When the CPI rises, it means that the cost of living is incre...
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Growth vs Value Investing: What Is the Difference?

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Growth vs Value Investing: What Is the Difference and Which Strategy Fits You? Executive Summary Growth vs value investing describes two different approaches to selecting stocks. Growth investors generally focus on companies expected to increase revenue, earnings, or cash flow faster than the broader market, while value investors look for companies whose market prices appear low relative to their underlying fundamentals. Neither approach consistently leads the market in every environment. Growth stocks can benefit when investors place a high value on future earnings and economic conditions support strong expansion, while value stocks may become more attractive when valuations, interest rates, or economic expectations favor companies with established businesses and current cash flows. For long-term investors, the key question is not simply whether growth or value is "better." Understanding how the two styles work, why they perform differently, and how they can co...
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