Growth investing is based on the goal of identifying companies that have the potential to experience growth in earnings greater than other companies in their industry sector (e.g., technology and transportation). Companies focused on growth tend to emphasize reinvestment of profits in the company over the payment of dividends. The reinvestment increases the company's earnings, which typically increases the share price at which the stock trades and should lead to greater capital gains to investors. Growth investing need not conflict directly with value investing. However, they tend to be viewed as competing strategies.
We would like your feedback on this Personal Finance Frequently Asked Question.
