Stock Investment

Growth stock investing is a favored approach by investors and fund managers who attempt to identify stocks that are likely to outperform the market indexes. No one individual necessarily agrees on the criteria for selecting high growth stocks. For the most part, fundamental selection criteria includes accelerating sales and market expansion initiatives that contribute to earnings growth and price gains. Practitioners of technical analysis also use price derivatives and other indicators to time entry and exits. Williams O'Neil's books provide additional insight into this.

Investors can do their own screening for growth stocks by identifying small companies with high growth prospects. Often these companies have new products or are subject to great demand for goods and services which are being reflected in their earnings growth. They often go unnoticed by the institutions if they have small market capitalizations. Institutions, by the nature of their mandates, can only invest in stocks of a certain size due to the size of the positions they take. If the company does not have sufficient liquidity to sustain getting in and out of the stock, funds must refrain from investing in them. This provides opportunities for small nimble investors who have done their research and do not face size or sector constraints.

Perhaps the most famous practitioner of growth stock investing is William O'Neil who has conducted life long research into growth stocks and developed a set of criteria for selecting candidates. He has documented case studies to support his research and has written several books that have been applauded by investors that have read them. The investors.com website provides additional articles, subscription options and screening tools to support growth stock decision making. Individuals who want to learn more about emerging growth stocks are encouraged to take out a trial to the service and read the articles provided on the site. Peter Lynch is another individual who wrote books on espousing an approach to selecting winning growth stocks. Individuals who want to know more should investigate his books for additional insight.

Managed fund and mutual funds also provide an opportunity for individuals to gain exposure to top growth stocks. You can buy in a certain number of units, pay the entry, exit and management fees and sit tight while professional money managers take care of business. You can examine the options online by doing further research into the funds management arena. A qualified investment advisor can assist in this regard.

Privacy Policy | Contact Us |