Growth Investing

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 than its industry or the overall market.

Notes:

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 GARP (growth at a reasonable price) strategy.

See also: GARP, Growth Company, Growth Fund, Growth Rates, P/E Ratio, Value Investing, Value Stock, Warren Buffett