Growth Stocks - Page 14

Growth stocks are shares in companies that are expected to grow at an above-average rate compared to their industry or the overall market. These companies typically reinvest their earnings back into the business to fuel further expansion rather than paying dividends to shareholders. Investors buy growth stocks with the expectation that the company will continue to expand and increase its earnings, leading to capital appreciation over time. Growth stocks are often characterized by higher price-to-earnings (P/E) ratios, reflecting investor confidence in the company’s future growth potential. Sector-wise, they are commonly found in technology, healthcare, and consumer services industries. While they can offer substantial returns, growth stocks also tend to carry higher risks, as their prices can be more volatile and dependent on future performance forecasts.