What Are Growth Stocks?

Discover the Benefits of Growth Stocks

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Diversity is really important when it comes to investing. You need a broad range of stocks in your portfolio in order to both mitigate risk and maximise returns.

One type of stocks that ride in the fast lane are known as growth stocks. This article is an introduction to growth stocks, and how they can make a difference to your investing goals.

What are Growth Stocks?

Growth stocks are those which tend to consistently outperform the market average in terms of growth and revenue. In other words, they’re the brands we spend a lot of money on.

Brands that we consider as growth stocks tend to have cornered their niche, performing above the average during downturns, and times of plenty. 

What is Growth Investing?

Growth investing goes hand in hand with value investing. Value stocks are those brands which are seen as ‘safer’ or in some ways more ‘dependable’. They’re often more affordable, offering lower returns over a longer period of time.

People interested in growth investing are often willing to take more of a risk, as growth stocks, given their above-average momentum, are naturally more volatile as a result.

How to find Growth Stocks

Some growth stocks are obvious. Brands such as Apple, Alphabet, and Meta are all growth stocks. But growth stocks are subject to economic changes (such as rising interest rates) just like any other stocks.

The Bottom Line

When you’re investing in growth stocks it's important to do your own research and with all investing, there’s always a risk involved and make sure you invest only what you can afford to lose.

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