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But growth stocks are popular because, risk
notwithstanding, they can make more money than the
ordinary stock, and isn't that why we're investing in
the first place? You'll often find emerging companies
listed as potential top growth stocks while some more
staid corporations prefer to opt for dividend payments
directly to shareholders rather than putting the money
into something that would otherwise reduce the high
share price. The outlook for a growth stock is always
the best, since no one who's focused on a particular
stock expects it to do poorly, which can make it
difficult to tell the difference between the large cap
that's truly experiencing massive growth or a small cap
that's temporarily in the public eye.
So, what's better? Value vs growth is the usual balance
that good mutual find managers try to find; it's also
what investment counselors ask when they interview you
before you've started choosing your investments. The big
question is whether you're in a financial, maturational
and emotional place where more risk is tolerable. If you
are, either because you're young and have time to
recover from potential losses, or you have lots of money
so you can afford to play with some of it and lose or
win big, and you're fairly stable in mind so some sudden
dips and swoops won't unhinge you, then growth stocks
might not be such a bad thing. But you shouldn't put all
your investment dollars into growth because it is
riskier. Keep some for a rainy day in nice, quiet bonds
or something that will give you equity income without
the excitement.
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