Growth investing
Growth investing relies on identifying companies which will grow faster than average. The idea behind this approach is that shares in fast growing companies perform better than those of staid, reliable businesses.
Growth investors typically prefer young companies which are often at the forefront of a particular industry or technology. Growth stocks typically trade at relatively high prices compared to their earnings, reflecting their expected growth. And, as they tend to be high-flyers, share prices can be more volatile than average. Dividends are either low or non-existent. Phil Fisher was a pioneer of growth investing.
Next Section: Value investing
