Definition of Growth investing:
Investment strategy that seeks stocks (shares) with superior earnings growth prospect, irrespective of their prices. Such stocks tend to have low dividend yields, less downside protection, higher volatility, and higher sensitivity to changes in interest rates than low growth shares. Firms with shares that trade at high valuation levels usually have high price-to-book (PB), price-to-earnings (PE), and price-to-sales (PS) ratios. See also value investing.
Growth investing is highly attractive to many investors because buying stock in emerging companies can provide impressive returns if the companies are successful. However, such companies are untried, and thus often pose a fairly high risk.
Growth investing is an investment style and strategy that is focused on increasing an investor's capital. Growth investors typically invest in growth stocks—that is, young or small companies whose earnings are expected to increase at an above-average rate compared to their industry sector or the overall market.
How to use Growth investing in a sentence?
- Growth investing is a stock-buying strategy that focuses on companies expected to grow at an above-average rate compared to their industry or the market.
- Ultimately, growth investors try to increase their wealth through long- or short-term capital appreciation.
- Growth investors tend to favor small, young companies poised to expand, expecting to profit by a rise in their stock prices.
- Growth investors look at five key factors when evaluating stocks: historical and future earnings growth, profit margins, returns on equity, and share price performance.
Meaning of Growth investing & Growth investing Definition