- Growth stocks are expected to grow sales and earnings at a faster rate than the market average.
- Growth stocks have a history of strong revenue growth and projected strong revenue growth and strong earnings.
- Growth stocks have the potential to outperform the overall market over time because of their future potential.
- Growth stocks often look expensive, trading at a high P/E ratio, but such valuations could actually be cheap if the company continues to grow rapidly.
- Investors pay more based on expectations, but but these stocks dip and dive if those expectations aren’t realized. You lose.
- Growth stocks typically don’t pay dividends.
- Growth stocks have the potential to perform better when interest rates are falling and company earnings are rising.
- Growth stocks tend to excel during bull markets or periods of economic expansion.
- Growth stocks are anticipated to grow significantly above the average growth for the market.
- Examples of growth stocks are: Amazon AMZN, FaceBook FB, Apple AAPL, Netflix NFLX, Zoom ZM, Square SQ, Bidu BIDU, Alibaba BABA (which by the way is also a value stock trading at low P/Es).
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation.
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He retired after 50 years of defending taxpayers audited by the IRS, EDD, BOE and other governmental agencies. He published a book on “How to Avoid or Survive IRS Audits” that’s available at Amazon. Readers may email tax questions to [email protected].
