Growth stock investing is a typical way long term investing. When we hear the phrase "stock market", we might think of shares being traded daily. But trading in the stock market is different from growth stock investing. In trading, traders only take advantage of the stock's price fluctuation. Usually, a trader buys a stock at a lower price and sells at a higher one. The profit comes from the price margin or the resulting balance between the buying and the selling price. In growth stock investing, it is not only the increasing price of stocks that makes an individual investor buy some shares. The growing size of the portfolio and its dividends are, in fact, the primary considerations.

Buying some growth stocks begins with identifying the future of a small company. Most people think that large companies are a good bet for investment. In reality, these large companies do not have any more room for growth, perhaps because of operational costs. The most probable reason to buy such blue chips is the stability of investment and income. Smaller companies can be a better source of growth stocks. However, not all small companies could become growth stocks. There must be a condition to determine so. Some companies are said to be growth stocks when they are fast-growing. Ideally, early buyers are the ones who will benefit the most. Thus, every investor wishes not to be late in their entry.

It must be sought and analyzed why some companies grow so fast. It could be that they are competitive in their respective industry, or they happen to get some opportunities that make them competitive. This competitiveness can be identified by their consistent effort to innovate. Assuming a company introduces a new product that is unique in the market. After a short period, the product becomes popular and the best in the market. Not long ago, the company plans to develop another unique product to sustain its market dominance and repeat the same miracle. Since they have proven their credibility, investors will surely line up to buy some shares of such a company even upon the news that the company is said to develop another competitive product. This aggressive innovation can make the company a candidate for becoming a growth stock.

It is recommended that investors start with enough capital when investing in growth stocks. There is no exact amount of what is enough for all investors. But everyone knows what is acceptable for him. Let us suppose that we started with $50,000. We bought stock worth $1 per share, so we owned 50,000 shares of a growth stock. After a year, our store was worth $2, and the dividend was $10%. If the prize were declared to be a stock dividend, our shares would become 55,000 shares. Since the stock's market value was $2, we had a floating investment worth $110,000. In just one year, we gained more than a hundred per cent. If we had put the money in a bank, we would have earned only around 10%. In that case, our money would only be $55,000. This example is not a joke. It happens all the time in the US stock market. The important thing an investor should consider is to select the right stock. Therefore, in this scenario, growth stock investing is value investing. Investors should invest in anticipation of shares valuation. The larger the capital we invest, the higher the value the investment can have.

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