Should investors chase growth or hunt value?

Should you try to invest in countries that are likely to see high GDP growth, or in markets that are cheap?

The question of whether countries that have higher growth tend to have higher investment returns over the long term is a hotly contested one. Studies come to different conclusions: the answer seems to depend on which countries you look at, the time period involved, whether you consider inflation-adjusted returns for local investors or foreign-currency returns for international investors, among other factors.

However, over the shorter term, the picture seems clearer. Studies suggest that, over periods of a few years, countries with the best GDP growth prospects tend to offer higher returns certainly once currency movements are taken into account.

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.