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Growth Stocks

Growth stocks are the glamour investments on Wall Street.

They are the reason all those talking heads on CNBC have jobs, and what makes Jim Cramer ramble on as if he’s just chugged five Red Bulls (maybe he has). Growth stocks often outpace the market, and the best ones can earn triple-digit returns in a short amount of time. So it’s not surprising that they generate so much excitement and endless chatter.

Get everything you need to know about investing in growth stocks in our FREE Special Report, 10 Forever Stocks to Buy Now.

Of course, there’s a caveat to investing in these stocks. Unlike time-tested dividend stocks or bargain-basement value plays, these stocks carry plenty of risk. The companies are less mature, have smaller margins, and typically don’t pay a dividend. Thus, the stocks can be very volatile, especially around earnings season.

For many investors, however, the risks of investing in these stocks are worth the potential rewards. Apple (AAPL), (AMZN), Netflix (NFLX)—all of them started off as growth stocks before they became some of the best-performing and most coveted stocks on the market. Those who got in early earned triple-digit, even quadruple-digit, returns.

There are several keys to finding the right growth stocks:

  • Invest in fast-growing companies. It’s a rather obvious prerequisite. But it’s important to know what fast-growing means. It means investing in fast-growing industries, where revolutionary ideas and services are being created. Any little-known stock that provides a product that is essential to that budding industry makes for a good growth stock.
  • Buy stocks that are outperforming the market. Companies can promise all kinds of financial growth. But is that growth potential translating to a rising share price? The best investing tips come from the performance of the stocks themselves.
  • Use stock market timing. Never underestimate the power of the market to move stocks. You don’t want to invest in a growth stock just as the market is plummeting. If you’re in a bull market, you can afford to be aggressive in buying stocks that are more speculative.
  • Be patient. Not every growth stock will make you rich overnight. Very few will, in fact. Even Apple took years before it morphed into the biggest technology behemoth in the world. In the investment world, time is your friend. If you get out of a stock too early, you may miss out on some big gains months down the road.

Growth stocks were the basis upon which Cabot Wealth Network was founded in 1970. Our founder, Carlton Lutts, gave up a career in engineering to pursue his passion for stock selection and market timing.

More than half a century later, we’re much more than a growth investing advisory. But growth stocks—and helping individual investors earn big profits from them—are still at the heart of what we do via our flagship advisory, Cabot Growth Investor.

Investing in these stocks can be tricky. Finding a hidden gem that has yet to be fully discovered by the market is simultaneously exciting and frustrating. Look for up-trending earnings growth, improving profit margins, and booming industries. If done right, investing in growth stocks can be both highly satisfying and highly profitable.

And we’re here to help!

Growth Stocks Post Archives
Bull Market stocks are those that benefit from, and outperform during, a bull market. Here are three I like in what looks like the first leg of a bigger move.
If you have money to invest and want Tesla-like profits, you should invest in the next Tesla. How do you identify that stock? Here’s my list.
If you’re looking to start an investment portfolio on the cheap, here are the three best stocks under $10 to buy with momentum.
New technologies are making nuclear energy much safer and more efficient than before. And nuclear stocks are benefitting.
These growth investing rules have been carefully selected as the most important guidelines a growth investor can use.
The IPO market has been ice-cold for the last two years, but there’s evidence things are heating up in 2024.
As the world races to combat global warming, it will need nuclear power to do it. And these three nuclear energy stocks should benefit.
Consumer trends are changing in a big way but demand for caffeine has never been higher. That’s setting up big opportunities for investors in energy drink stocks.
They are two of the most recognizable names out there, and good stocks, but which is the better buy? Let’s break down Apple vs. Amazon stock.
Bull market leaders are still holding up, but there are early signs of rotation benefiting fresher names in a handful of sectors. Here are four we like.
Electric vehicle stocks have seemingly shifted into “Neutral,” but these hybrid-focused car companies are picking up speed as consumer preferences shift.
People always ask us how we manage to find the market’s leading growth stocks. Here are five characteristics we screen for.
AMZN stock and GOOG stock are two musts for any portfolio. But which tech behemoth is better positioned for future growth?
Much like the NFL, the field of sportsbook stocks is dominated by two heavy hitters while a couple of also-rans try to make things interesting.
I performed a study on the common threads in great growth stocks I recommended over a 10-year period. Here’s what I discovered.