Growth investing is a style of investment strategy. Those who follow this style, known as growth investors, invest in companies that exhibit signs of above-average growth, even if the share price appears expensive in terms of metrics such as price-to-earning or price-to-book ratios. In typical usage, the term "growth investing" contrasts with the strategy known as value investing. An investor profile or style defines an investors preferences in money decisions, for example: Short term trading or Long term holding (buy and hold Risk averse or risk tolerant / seeker All classes of assets or just one (stocks for example) Value or growth stocks, big cap or small cap... Invest redirects here. ... This article or section does not adequately cite its references or sources. ... In finance, the PE ratio of a stock (also called its earnings multiple, just multiple, or P/E) is used to measure how cheap or expensive share prices are. ... Price-to-book ratio or P/B ratio, is a ratio used to compare a stocks market value to its book value. ... Value investing is a style of investment strategy from the so-called Graham & Dodd School. ...

However, some notable investors such as Warren Buffett have stated that there is no theoretical difference between the concepts of value and growth ("Growth and Value Investing are joined at the hip"), in consideration of the concept of an asset's intrinsic value. In addition, when just investing in one style of stocks, diversification could be negatively impacted. Warren Edward Buffett (b. ... In options terminology, an option has intrinsic value, if it is in-the-money. ... Diversification is a measure of the commonality of a population. ...

Growth at Reasonable Price

After the busting of the dotcom bubble, "growth at any price" has fallen from favour. Attaching a high price to a security in the hope of high growth may be risky, since if the growth rate fails to live up to expectations, the price of the security can plummet. It is often more fashionable now to seek out stocks with high growth rates that are trading at reasonable valuations.

Growth Investment Vehicles

There are many ways to execute a growth investment strategy. Some of these include:

• Emerging markets
• Recovery shares
• Blue chips
• Internet and technology stock
• Smaller companies
• Special situations
• Second-hand life policies

See also

• Value investing
• Philip Arthur Fisher and Kenneth L. Fisher
• David Dodd
• Warren Buffett
• Growth stock
• Magic Formula Investing

Value investing is a style of investment strategy from the so-called Graham & Dodd School. ... Philip Arthur Fisher (September 8, 1907 – March 11, 2004) was a very successful stock investor best known as the author of Common Stocks and Uncommon Profits (ISBN 0-47111-927-X), a guide to investing that has remained in print ever since it was first published in 1958. ... Kenneth L. Fisher (b. ... David LeFevre Dodd (1895 - 1988) was an American economist, financial analyst, collegiate educator, author, and close colleague of Benjamin Graham (1894 - 1976) at Columbia University. ... Warren Edward Buffett (b. ... Growth Stocks in finance, are stocks that appreciate in value and yield a high return on equity (ROE). ... There are very few or no other articles that link to this one. ...

External links

• fool.com: Value, Growth, and Buffett
• Morningstar style box
• The Importance of Growth
• Value Investing and its Advantages