Next video:
Loading the player...

Growth investing is a strategy where an investor seeks out companies demonstrating signs of high earnings that are well above the average rate compared to other firms in their industry and within the overall market. Investors interested in these stocks focus on capital appreciation and future earnings potential, and often choose investments that they believe will outperform income stocks, which are thought to exhibit slow growth. While income stocks pay out earnings to their shareholders in the form of dividends, growth stocks reinvest the earnings into the company to achieve further growth.

Tech companies and emerging markets are commonly associated with growth investing, as they are often priced higher than their earnings or book values.
 

  1. No results found.
Related Articles
  1. Investing

    Benefits and Risk of Growth Stock

    A growth stock is a share in a company whose earnings and sales are growing faster than those of most other companies.
  2. Investing

    Introduction To Growth Investing

    There are principles and techniques that are applicable for many different types of investors and growth strategies.
  3. Investing

    Growth Investing: 3 Tips to Consider

    Learn the basics of growth investing, and discover three tips for avoiding the risk of losing money while employing a growth investment strategy.
  4. Investing

    5 Characteristics of Good Growth Stocks

    Growth stocks can give investors good returns, but not all growth stocks are the same. From leadership to growth, there are traits good growth stocks share.
  5. Small Business

    The Financial Characteristics Of A Successful Company

    There are many factors that contribute to a profitable business. Find out what they are here.
  6. Managing Wealth

    How to Use Earnings Season to Make Better Decisions

    Earnings season reflects the state of the stock market, but also demonstrates how the overall economy is performing.
  7. Investing

    Value or Growth Stocks: Which is Best?

    The answer to the age-old growth versus value debate depends on a number of factors. Here's what to consider.
  8. Investing

    Why Do Some Companies Pay A Dividend, While Other Companies Do Not?

    Rapidly growing companies usually don’t pay dividends. Instead, they reinvest earnings to fund growth and increase their value.
  9. Investing

    How to Invest Your Excess Cash in Growth Stocks

    Understand the choices that must be made when using excess cash to invest in growth stocks, including different investment vehicles.
Hot Definitions
  1. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that decreased and eventually eliminated tariffs to encourage economic activity ...
  2. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  3. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  6. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
Trading Center