Growth Investing

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DEFINITION of 'Growth Investing'

A strategy whereby an investor seeks out stocks with what they deem good growth potential. In most cases a growth stock is defined as a company whose earnings are expected to grow at an above-average rate compared to its industry or the overall market.

INVESTOPEDIA EXPLAINS 'Growth Investing'

Growth investors often call growth investing a capital growth strategy, since investors seek to maximize their capital gains.

Although it is often said that growth investing and value investing are diametrically opposed, a better way to view these two strategies is to consider a quote by Warren Buffett: "growth and value investing are joined at the hip". Another very famous investor, Peter Lynch, pioneered a hybrid of growth and value investing with what is now commonly referred to as a "growth at a reasonable price (GARP)" strategy.

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RELATED FAQS
  1. How attractive is the internet sector for a growth investor?

    The Internet sector is an attractive sector offering many benefits to a growth investor. Growth investing is an investing ... Read Full Answer >>
  2. Why would growth investors be attracted to the automotive sector?

    Growth investors are attracted to the automotive sector because it offers greater returns than the broader market. Automobile ... Read Full Answer >>
  3. What are the main advantages of fixed income securities?

    Fixed income securities are commonly used to diversify an investor's portfolio, as they reduce the overall risk of an asset ... Read Full Answer >>
  4. How can I hedge my portfolio to protect from a decline in the Internet sector?

    The best portfolio hedges to protect against declines in the Internet sector are non-cyclical sectors, which tend to remain ... Read Full Answer >>
  5. What are examples of popular companies in the Internet sector?

    There have been a number of financial fortunes created by highly successful Internet companies. Some of these firms, such ... Read Full Answer >>
  6. Why should a growth investor consider the metals and mining sector?

    Growth investors consider investing in the metals and mining sector primarily due to the general trends and changing face ... Read Full Answer >>
  7. What are some of the most popular mutual funds for investing in the metals and mining ...

    Mutual funds are one of the many investment options available for growth investors looking for a portfolio that includes ... Read Full Answer >>
  8. What does it mean if a share's market value is significantly higher than its book ...

    If a share’s market value is significantly higher than its book value per common share, this usually indicates investors ... Read Full Answer >>
  9. What is the forest products sector?

    The forest products sector is comprised of companies involved in growing, harvesting and/or processing wood and wood fiber, ... Read Full Answer >>
  10. Is the railroads sector appropriate for a growth investor?

    The railroads sector is a subset of the transportation sector, which is a group of stocks that relates to the transportation ... Read Full Answer >>
  11. How can growth investors benefit from investing in the oil & gas sector?

    The value of a company’s stock is typically determined by supply and demand. However, stock prices from oil and gas exploration ... Read Full Answer >>
  12. I've heard some "market gurus" claim returns of up to 400% annually. Is this possible?

    To answer your question in a word: No! Although we wish such a phenomenal investment system were real, the claims you speak ... Read Full Answer >>
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