Growth Investing
Growth investing is an investment strategy that focuses on stocks of companies that are expected to grow at an above-average rate relative to the market. Growth investors seek out stocks of companies that have the potential to grow faster than the overall market. This type of investing is often associated with higher risk, as the stocks of these companies may be more volatile than the overall market. However, growth investors are willing to take on this risk in the hopes of achieving higher returns.
History of Growth Investing
Growth investing has been around since the early days of the stock market. In the 1950s, the concept of growth investing was popularized by Benjamin Graham and David Dodd in their book, Security Analysis. Graham and Dodd argued that investors should focus on the long-term potential of a company, rather than its current stock price. This concept of growth investing has been embraced by many investors since then, and has become a popular investment strategy.
Comparison of Growth Investing vs. Value Investing
| Growth Investing | Value Investing |
|---|---|
| Focus on stocks of companies with potential for above-average growth | Focus on stocks of companies that are undervalued relative to their intrinsic value |
| Higher risk, potentially higher returns | Lower risk, potentially lower returns |
| Focus on long-term potential | Focus on current stock price |
Summary
Growth investing is an investment strategy that focuses on stocks of companies that are expected to grow at an above-average rate relative to the market. Growth investors seek out stocks of companies that have the potential to grow faster than the overall market, and are willing to take on higher risk in the hopes of achieving higher returns. For more information on growth investing, investors can visit websites such as Investopedia, The Motley Fool, and Seeking Alpha.
See Also
- Value Investing
- Index Investing
- Momentum Investing
- Contrarian Investing
- Fundamental Analysis
- Technical Analysis
- Portfolio Management
- Risk Management
- Diversification
- Asset Allocation
