What are Growth Stocks?

Growth stocks are stocks issued by companies that are in rapid development. Growth stocks do not have specific rights, and they are a subjective evaluation of stocks issued by certain companies. Growth stocks are mostly common stocks, specifically those stocks that do not necessarily get high dividends or other preferential conditions immediately, but have promising future prospects. Since the stock outlook mainly depends on the situation and development of the issuing company, only those companies issued by companies whose sales and profits are increasing rapidly and whose growth rate is much faster than the average growth rate of the country and its industry can be Think of growth stocks. Generally speaking, most of these companies belong to emerging industries or industries with great potential for development. Companies often use new materials, use new technologies, develop new products, expand new markets and other innovative activities to enable themselves to achieve rapid development, so the shares they issue will also increase in value as the company grows and grows. However, in the early stage of issuance, growth stocks tend to show low stock returns and market transfer prices lingering at low levels. This is because such companies are in a period of rapid growth and need to retain more profits as reinvested capital to speed up the company's development and expansion in order to win opportunities and occupy the market. Therefore, they usually only pay shareholders in the short term. Less dividends, so the immediate earnings of shareholders may not be high. However, with the development of the company, the enhancement of strength and the substantial increase in profits, growth stocks are expected to not only obtain rich dividend income in the future, but also to earn large bid-ask spreads from the rising share price. Therefore, growth stocks are most popular with long-term investors. ^[1]

Growth stock

Growth stocks are stocks issued by companies that are in rapid development. Growth stocks do not have specific rights, and they are a subjective evaluation of stocks issued by certain companies. Growth stocks are mostly common stocks, specifically those stocks that do not necessarily get high dividends or other preferential conditions immediately, but have promising future prospects. Since the stock outlook mainly depends on the situation and development of the issuing company, only those companies issued by companies whose sales and profits are increasing rapidly and whose growth rate is much faster than the average growth rate of the country and its industry can be Think of growth stocks. Generally speaking, most of these companies belong to emerging industries or industries with great potential for development. Companies often use new materials, apply new technologies, develop new products, expand new markets and other innovative activities to enable themselves to achieve rapid development, so the shares they issue will also increase in value as the company grows and grows. However, in the early stage of issuance, growth stocks tend to show low stock returns and market transfer prices lingering at low levels. This is because such companies are in a period of rapid growth and need to retain more profits as reinvested capital to speed up the company's development and expansion in order to win opportunities and occupy the market. Therefore, they usually only pay shareholders in the short term. Less dividends, so the immediate earnings of shareholders may not be high. However, with the development of the company, the enhancement of strength and the substantial increase in profits, growth stocks are expected to not only obtain rich dividend income in the future, but also to earn large bid-ask spreads from the rising share price. Therefore, growth stocks are most popular with long-term investors. ^[1]

The so-called growth stock refers to the small size of the company when the shares were issued, and the company's business

The following factors should be considered when selecting growth stocks:

1. Enterprises must have growth drivers. This motivation includes products, technology,

Management integrity

Management needs to be honest and trustworthy and of a good standard. An excellent and trustworthy management must be

Buy timing

In general, Zhuge Liang's thinking afterwards is: buy at a low point, sell at a high point, and then

It's easy for investors to misread growth stocks

One is to treat pseudo-growth stocks under the guise of growth as sustainable growth stocks.

Famous in history are Lantian, Yinguangxia, and Dongfang Electronics; at this stage, there are more. For example, the current Hangang Iron and Steel Company can basically determine the pseudo-growth stocks.

The second is to treat short-term explosive growth as investment in growth stocks, and therefore hold it for a long time, resulting in flat profits and even losses.

The third is to pay excessive prices for growth stocks. Good companies need to correspond to appropriate prices, otherwise our investment returns will still not be ideal. For example: China Life and China Ping An are both good companies, but whether they are good stocks, the price-earnings ratio is 100 times. Even if they are not losing, that is also making future money.

The fourth is to buy a company that you do nt understand, and also regard it as a growth stock. Long-term investment has terrible consequences.

Fifth, after buying, there is no regular follow-up feedback information. Regardless of the question, the fundamentals of the company have changed without any knowledge.