Growth stocks are stocks of companies which earnings per share grow faster than average on the market. Such is theory, but if look in practical side, earnings grow faster most of the times only when economical cycle goes up. Multiples of such stocks are high and investors pay high stock price (grow stocks aren’t cheap stocks) for future perspectives.
Typically growth stocks pay out very few dividends (dividend yield rarely exceeds 2%) or don’t pay dividends at all, and when the bear market comes, investors try to get rid of growth stocks and these stocks fall down much faster than value stocks.
Read more about growth stock investment strategy.
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