Growth Stock

What is it? Stocks of younger or smaller companies, have relatively high risk and represent relatively aggressive investments. Usually, they have grown significantly in the past 3 to 5 years and are expected to continue growing for the next few years. Dividends, if any, are small and erratic, mostly because growing companies prefer to reinvest earnings in development efforts rather than set aside a percentage for shareholders. Growth stocks are usually purchased as a long-term holding, with the expectation that they will pay dividends (as well as appreciate in price per share) in the future, thus providing income at a later time.

Added By: Ben

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