Investing in growth stocks can be a great way to earn life-changing wealth in the stock market. The key, is to know which growth stocks to buy -- and when.
To help you get started, here’s a handy guide to growth investing. With these tools and strategies, you’ll be able to position your portfolio for long-term success with growth stocks.
To dig further, let us understand growth stocks
What is a growth stock?
Growth stocks are companies that increase their revenue and earnings at a faster rate than the average in their industry or the market.
Growth investing, however, involves more than picking stocks that are going up.
Growth company has developed an innovative product or service that is gaining share in existing markets, entering new markets, or even creating entirely new industries.
Businesses that can grow faster than average for long periods tend to be rewarded by the market, delivering handsome returns to shareholders. And, the faster they grow, the bigger the returns can be.
Growth stocks tend to be more expensive than the average stock in terms of metrics like price-to-earnings, price-to-sales, and price-to-free-cash-flow ratios.
Yet, despite their premium price tags, the best growth stocks can still deliver fortune-creating returns to investors as they fulfill their awesome growth potential.
Growth stocks come in all shapes and sizes. They can be found in a variety of industries, within India and in international markets.
How to find growth stocks
To find great growth stocks, you’ll need to:
1. Identify powerful long-term market trends and the companies best positioned to profit from them
2. Narrow your list to businesses with strong competitive advantages
3. Further narrow your list to companies with large addressable markets