Growth at a Reasonable Price (GARP) is an equity investment strategy that combines the attributes of growth and value investing.#
- GARP investors focus on companies with earnings growth above the overall market level, but without extremely high valuations.
- GARP shares are growth-oriented with relatively low price/earnings (P/E) multiples.
- GARP investors typically use the price/earnings growth ratio (PEG) to make investment decisions, looking for companies with a PEG of 1 or less.
- Instead of choosing individual securities, investors can apply the GARP strategy through index funds that track the S&P 500 GARP index.