1. So, just what makes a growth stock?
A growth stock is generally a firm that increases earnings, revenue, or cash flow at a much faster rate than the general market, and it usually reinvests profits in business growth rather than paying dividends.
2. Are growth stocks riskier than value stocks?
Yes, growth stocks may be riskier, as their valuations depend on future performance. Stocks can plummet when growth slows or earnings are insufficient.
3. What would be the long-term holding period of growth stocks?
Long-term growth stocks ideally have a holding period of a few years (510+) so that the business model has time to scale, implement, and take advantage of market dynamics.
4. Does the user require a huge portfolio to initiate investment in growth stocks?
No – users can start with small allocations and increase them. The diversified strategy (between industries or locations) can be used to manage risk.
5. The user needs to specialize in US growth stocks or domestic stocks (in case I am a local investor)?
It is based on risk exposure, objectives, and currency exposure. US growth stocks can provide exposure to global technology trends, whereas domestic ones may benefit from local economic drivers.