| Regardless of your financial goals, there is a place in | | | | a better-than-expected report can cause a price to |
| your portfolio for growth stocks. These are | | | | spike higher as professional investors, like mutual |
| companies whose earnings are growing at an | | | | funds and hedge funds, snap up shares. Don't |
| above-average rate relative to the general market. | | | | underestimate the importance of earnings reports. It |
| Growth companies normally do not pay dividends, | | | | helps to use a tool like Yahoo's earnings calendar |
| preferring instead to reinvest retained earnings back | | | | when you own or are thinking of buying a stock. |
| into capital projects. Here are some tips for | | | | Almost every successful growth stock investor is in |
| identifying top-performing growth stocks. | | | | the habit of tracking earnings dates. |
| While it's tempting to buy a stock based on a tip or a | | | | 3. Monitor the company's sales growth |
| rumor, you'll find that it's worth doing a little more | | | | As a final point, when you are thinking of buying a |
| research to find stocks proving themselves with | | | | stock, make sure to monitor how fast its sales are |
| fast-growing sales and earnings. | | | | growing. This can help you understand whether its |
| 1. Understand the company's business | | | | earnings are driven by cost cuts, or by increasing |
| It is important to understand the company's business, | | | | revenue. Of course, growing revenue is the |
| because doing so helps prevent you from focusing | | | | preferable reason for profit growth, as it signifies a |
| on the wrong kind of companies. Generally speaking, | | | | product or service that's in heavy demand. Don't |
| younger, smaller, entrepreneurial companies have the | | | | forget this key investing step.. If you don't, you could |
| fastest growth. Technology firms are often growth | | | | find yourself owning stocks of companies with |
| companies, because they reinvest their profits into | | | | dwindling sales, a factor that causes professional |
| new products and services. Older, more mature | | | | investors to sell their shares. When that happens, the |
| companies that are no longer innovating typically don't | | | | price drops. |
| offer the best growth opportunities. | | | | As noted earlier, there's a place for growth stocks |
| 2. Know when the company reports quarterly | | | | even in a conservative investor's portfolio. However, |
| earnings | | | | you don't want to make investing mistakes that |
| Very nearly as essential as understanding the | | | | could cost you dearly. When you want to buy a |
| company's business, any time you are buying a | | | | stock, take a few minutes to understand the |
| stock, it's crucial to know when its next earnings | | | | company's business, learn its quarterly reporting date, |
| report is due. A report that misses Wall Street's | | | | and check whether sales are growing. This will give |
| views can sink a stock in no time, as investors | | | | you a greater chance of success in the stock |
| anticipate the worst, and bail out. On the other hand, | | | | market. |