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Growth Investing in a Sophisticated Market

Most investors will agree with the assumption that the concept of growth investing is alien to day traders.

When you observe closely, however, every day trader will always assess their portfolio at the end of the trading session to see how many pips they added to their account. If the number of pips increases consistently over time, then that makes the trader good. However, this increment is nothing more than growth put in a different language.

At the end of the year, the same trader will sit down and see how much the portfolio grew over the past 12 months. Yet if you were to ask him the type of investor he was, he is most likely to call himself a day trader. Therefore, in every aspect of investing, the most crucial element is growth.

The same concept is employed when evaluating the performance of a stock, mutual funds, hedge funds, equity funds and even regular businesses over time. The rate of growth and the average rate of return on an annual basis always comes into play.

Did you know most lenders assess a business' growth prospects and cash flow expectations before deciding whether to give them a loan?

This helps them determine the company's ability to generate more money in the future. If there is money in the pipeline, then there will be no issues in servicing the loan.

Who exactly is a growth investor?

In short, most people who call themselves growth investors do so because they give the money to someone with the hope of growing it over time through shrewd management. Take, for instance, investing in a growth stock. You do so because you believe there is a huge opportunity for the company to grow in a few years' time, which means you are entrusting your investment to the management of the company.

In most cases, this type of growth is associated with dividend stocks...


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