Introduction to Growth Stocks and Growth Investing for Kids and Teens
This video explains the concept of Growth Stocks and Growth Investing in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about it, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What are growth stocks
- What is growth investing
- How to identify a growth stock
- When should you choose growth investing
- How to become a growth investor
What are growth stocks?
Growth stocks are companies that are expected to grow their sales and profits at a much faster rate than the market average. This high rate of growth in turn results in increased stock price.
Some examples of growth stocks are Amazon, Facebook, Netflix, and Alphabet.
What is growth investing?
Typically these stocks are expensive but the potential for high growth is what makes them attractive to growth investors, whose focus is to make money through capital gains when they sell them in the future.
What are some characteristics of growth stocks? How do I know if a stock is a growth stock?
Growth stocks are usually either young companies who are innovators in their field, or technology companies that have a big market share due to their unique offerings.
They could also have low revenue, but show a potential to grow rapidly in the future.
Growth stocks typically do not pay dividends as they try to reinvest their profits to accelerate their growth.
When does growth investing make sense?
Growth stocks are considered to be risky investments – they can provide high returns, but can also result in a huge loss.
Is growth investing a good strategy for me? How can I become a growth investor?
Finding growth stocks that are likely to give good returns is very difficult.
And so, when investing in growth stocks, it’s best to invest using a Mutual Fund that focuses on growth investing. That way, the fund manager will do the hard work of picking stocks.
Having said that, actively managed mutual funds can charge high fees which significantly eat into your returns.