Growth investing

Growth investing is an approach focused on companies expected to grow revenue and earnings significantly faster than the broader market, often paying less attention to current valuation in exchange for that growth potential. It is generally treated as the counterpart to value investing.

Growth stocks often trade at higher valuation multiples than the rest of the market because investors are paying up for future growth that has not happened yet. This means growth investing can produce larger gains when that growth materializes, but also larger losses if it disappoints or if the broader market re-rates growth stocks downward.