There are two main approaches to investing – growth and value. Growth investors are willing to pay that little bit more for quality if they think it’ll be worth it in the long run.
If we left a group of growth investors in a clothing store, we would find them analysing the history of the manufacture and keeping a watchful eye on signs the brand will ‘go big’ in the next few years. The same method works for the stock market. When growth investors are looking to buy stock, they’ll focus on companies with a good track record that are expected to be worth a lot of money in the future. Growth investors focus on capital growth – which is the growth potential of shares.
Tips and tricks
As a growth investor, stick with the companies who don’t pay dividends. This money simply gets reinvested back into the business – which in turn would result in more growth.