Growth Investment Crash Course - E-book - ePub

Due to the rapid changes encountered in the social, economical, and technological status in the society, the financial market isbecoming more volatile causing a great impact on the capitalinvestment made by the investor. In today's market scenario, investors need to make a wise-decision on the type of financialinvestment the investor is intending to make. Fundamentally, there are two main types of investments that are available inthe market and they are: a slow and steady income generatingtype of investment known as the defensive investment, and ahigh-profit generating with a high-risk oriented type ofinvestment known as the growth investments.
Generally, the investors are advised to consider a diverseportfolio of investments to gain maximum profit with lower riskscatered to various economic conditions prevailing in the market. The diverse portfolio of an investor can include a combinationof investments ranging from a stable, income generatingdefensive investments (cash and fixed deposit) to a highlyvolatile and high profit generating growth investment plans.
While there are many pioneers who have contributed in thegrowth investment plan, the earnings cannot be guaranteedbased on a single thumb of rule or by adopting any specificstrategies. Some of the greatest investors who have contributedin the field of finance investments are Thomas Rowe Price, Jr, Philip Fisher, Peter Lynch, John Templeton and William J. O'Neil. These investors have adapted various types of investmentstyles including the successful long-term growth investment style.
However, none of these investors have completely adapted thegrowth investment style exclusively. Thomas Rowe Price, Jr, known as the father of growthinvestment, started his own fund investment association (T. Rowe Price Associates) in the year 1937. The investment styleof this association is to market funds on well-managed andhigh-profit oriented companies. Philip Fisher, a famous growth investor and founder of aninvestment management firm known as Fisher investments, inthe year 1931.
Fisher mostly invested in the manufacturingcompanies and emphasized on focusing on a limited number ofstocks that has the potential to outperform in sales and profitssector for a long term. He preferred to reinvest the earningsfor the development of the company and emphasized tomonitor the following key factors before investing in anycompany: tracking management quality, facilitating competitiveedge, and recording consistent sales growth.
William J. O'Neil, stands out for his owninvestment strategy that considers boththe quantitative and qualitative approachesfor determining the potential of high valuestocks. Further, in his style of investment, he emphasizes on holding onto stocks thatare of high value and selling out thestocks that are undervalued. While each of the great investors hasimplemented different investment styles tomeet their financial objectives, there is nosingle thumb rule or strategy thatpromises high-profit returns in the growthinvestment plan.