What Is Conservative Growth?

Growth investment strategy refers to the investment strategy for growth stocks. Growth stocks are stocks with growth rates above average. The reason why such stocks are attractive is because their extraordinary income growth can not only support the growth of dividends, but also enable stock holders to win a strong potential for capital appreciation. . Since 1930, growth investment strategies have gradually developed into one of the most popular investment strategies.

Growth investment strategy

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Growth investment strategy refers to the investment strategy for growth stocks. Growth stocks are stocks with growth rates above average. The reason why such stocks are attractive is because their extraordinary income growth can not only support the growth of dividends, but also enable stock holders to win a strong potential for capital appreciation . Since 1930, growth investment strategies have gradually developed into one of the most popular investment strategies.

Chinese name

Growth investment strategy

Part of speech

Stock nouns

Explanation

Investment strategy for growth stocks

Types of

Reasonable investment strategy

There are many forms of growth investment strategies, which can be divided into

The growth investment strategy of reasonable price entered the market earlier. It considers both the growth of earnings and the level of prices. It hopes that when it finds that stock returns have potential for growth, its price has not yet risen significantly, that is, the market has not yet made sufficient reflection on its potential for growth in earnings. It usually uses PE / G (PE is the price-earnings multiplier, which is the price-earnings ratio; G is the growth rate of earnings; PE / G is the ratio of the price-earnings ratio to the growth rate) as the criterion for determining whether to enter. Stocks with lower PE / G are ideal investment targets; higher PE / G indicates that although there is good growth, the price has fully reflected the growth potential, and there is little room for price increase.

The inertial investment strategy entered the market later. It usually assumes that the growth of income is like inertial motion. If there is no external force, the inertial motion of income growth will not stop. Even if there is a negative external force, due to the existence of inertia, the growth of earnings will not stop immediately, and it will generally last longer than the public expects. By the same token, once the negative external force has taken effect, the movement of income will gain new inertia, and the impact of negative external force will last longer than expected. Therefore, the inertia investment strategy strives to find stocks with extraordinary income growth. Even if the stock's income growth potential has been recognized by the public and its price has increased significantly, it also invests because it believes that this growth Under the effect of inertia, prices will rise. Therefore, the inertia investment strategy prefers those stocks whose prices have risen, but people's growth expectations are still conservative.