Growth stocks are a form of investment that offers investors the opportunity to grow their wealth over time. This type of stock is attractive because it provides longer-term returns rather than short-term gains, which may make them appealing for long-term strategies like retirement planning. So if you’re considering investing in growth stocks & have questions about what they are, how they work, and why they can be beneficial – look no further! This blog post by William Schantz will provide all the information one needs to know about this kind of stock and the potential advantages that come with investing in it.
What Are Growth Stocks? William Schantz Explains
Growth stocks are a type of equity-based investment that has the potential to yield greater returns than other types of securities, says William Schantz. This is typically due to their higher price volatility and rapid appreciation when compared with other investments. These types of stocks often have higher levels of risk, as they may not be as established as blue chip stocks or dividend-paying stocks, which can offer a more predictable return.
Growth stocks are attractive for investors because they can provide large capital gains over time. For example, investing in growth industries such as technology or healthcare can help take advantage of emerging trends and capitalize on them before others have had the opportunity to do so. Additionally, these types of investments attract those who prefer to take calculated risks in order to reap potentially high rewards.
When considering growth stocks, investors should be aware of the various criteria used to identify them and assess their potential. Factors such as sales growth, earnings per share (EPS) growth, and price-to-earnings (P/E) ratios are often considered in order to evaluate the overall health of a company and its ability to produce consistent returns over time.
To illustrate this point, consider Apple Inc., which is an example of a successful growth stock. As of 2020, Apple had averaged more than a 10% annualized revenue increase since 2011, with total revenues exceeding $260 billion in 2019 alone. Furthermore, its EPS has grown at an average rate of 21% since 2011, while its P/E ratio is at an impressive 26.90x, suggesting that the company has plenty of potential for future growth.
In summary, growth stocks can offer investors the opportunity to capitalize on rising markets and industries while taking calculated risks in order to potentially earn high returns on their investments. According to William Schantz, by understanding the criteria used to identify these types of securities and researching market trends, investors can maximize their chances of success when investing in growth stocks.
William Schantz’s Concluding Thoughts
In closing, growth stocks represent an exciting potential investment that comes with some risk. It is important, as per William Schantz, to do research prior to investing in a growth stock, as you are likely to make higher returns than with a standard stock, but there is additional risk involved. Growth stocks can be excellent long-term investments because they allow you to benefit from companies whose potential is still on the horizon and sometimes grow more quickly as compared to regular stocks. It’s important to understand the overall market conditions before making a decision about whether investing in growth stocks makes sense for your particular circumstances. Ultimately, growth stocks have the potential for higher rewards but come with greater volatility, so it’s important to understand them before taking any risks. Doing your diligence research and speaking with an advisor or financial planner can be incredibly helpful when it comes to smart investing decisions.