stocks over growth stocks is a compensation of risk rather than the behavioral explanation of investor biases.
While value and growth stocks are studied during the financial crisis of 2007-2010, some limitations and implications for future research exist. One major limitation concerns the sample size used in this thesis. In this thesis, the five most influential indices are studied, which consisted out of 187 companies. Therefore, stating (statistical) conclusion would be unreliable and makes it difficult to generalize towards other countries. Another limitation in this study is that the statistical tests concerning the difference between returns produced by value and growth stocks only give suggestions regarding market opportunities and not whether one particular trading strategy would be more profitable over another. A final limitation is the degree of survivorship bias due to databases used. While respectable databases, such as CRSP and Compustat preserve stock quotes of delisted companies in file, free extended databases delete stock quotes of delisted companies subsequent towards delisting. Moreover, there also exist a number of implications for future research on value and growth stocks. First, the inclusion of the present value of growth opportunities should be studied to determine whether under and overvaluation exist within value and growth stocks. A second implication of future research is to construct portfolios using the value-weighted approach to determine the influence on the value premium during the financial crisis of 2007-2010. A third implication is what factors influence the investor’s decision making and behavior towards the mental creation of over and undervaluation. A final implication concerns the inclusion of financial institutions and financial conglomerates within value and growth stocks during the financial crisis to determine the influence these companies have on the value premium.