| Before a potential investment there are several | | | | characteristics of growth investment:o The |
| points which the growth investor must take into | | | | average growth rates in revenue and earning of |
| account. Does the company which he has zeroed | | | | these companies are higher in comparison to the |
| on in, possess a stable management and whether | | | | other companies.oThese companies cater to such |
| its finance credibility is positioned for sustained | | | | industrial sectors which are continuously expanding. |
| growth. Then he must check whether the | | | | They are smoothly sailing through the current |
| present economic environment will benefit the | | | | demographic and economic cycle.oThese |
| particular industry of which the company is a | | | | companies do not pay dividends.oThese |
| part? And above all, the value of the stock is | | | | companies are characterized by such high |
| very important. | | | | growths that they often end up beyond the |
| To determine a sound entry price for a strong | | | | earning estimates.oThe continued growth of the |
| growth stock can be a difficult task. But to | | | | company determines the holding period. |
| determine the success of an investment, it is the | | | | Growth investment is all about estimating and |
| most important factor. An investor would ideally | | | | predicting the future. It is constantly in the |
| be inclined to buy into a growth company very | | | | investor's thought that whether the respective |
| early, because he would naturally like to garner | | | | company would maintain the same steady pace in |
| enough profit from its persistent growth. But at | | | | the stock market. He must be extremely |
| the same time it is very important for the | | | | concerned about the company plans and policies |
| investor not to place a huge chunk of his | | | | like revenue, earnings, and sales and so on. He |
| premium on his apprehension of the company's | | | | needs to keep an eye on the industry and the |
| growth potential. For, doing so might limit his | | | | level of participation of the company in that |
| future profits from another possible sector. | | | | growth. Some attentive reading done online and |
| At the starting point the investor needs to decide | | | | the financial press can immensely help the growth |
| about his own investment preference. He can | | | | stock investor. Another notable feature of the |
| either be a 'value' or a 'growth' investor or he can | | | | growth stock is that it belongs to growth |
| be both. But it is always advisable to choose a | | | | industries. A growth industry is usually related to |
| primary focus. It's important to note that growth | | | | some kind of technology. Next, the growth |
| and value investment are not contradictory | | | | stocks belong to companies that are small to |
| options but are rather two different approaches | | | | mid-sized. In fact a wide range of factors keep |
| to an identical situation. | | | | the large companies away from maintaining a |
| An investor can decide his own inclination | | | | steady growth rate. An exception being the |
| regarding which strategy appears the most | | | | Microsoft. |
| appealing. Given below are the basic | | | | |