Where to look for growth stocks

The search for great growth stocks begins with identifying macro trends that change the way people do everyday things.Digitization,for example,has been a dominant trend over the past two decades.It's also paved the way for other megatrends such as the rise of e-commerce and streaming entertainment and the move toward cashless payments.
Once growth stock investors identify a trend -- say,the rollout of driverless cars or the shift to renewable energy --that could be "the next big thing," they then identify which specific companies stand to benefit from the changing market dynamics associated with the trend.

Growth stocks can be those of companies of all sizes. The growth stocks that confer the least risk and have the most history are those of large-cap companies. Mid-cap and small-cap companies can also grow at attractive rates, but they are more likely to couple strong revenue performance with inconsistent profitability.

Is growth investing right for you?

While the potential reward of growth investing is high, the risk is elevated, too. If you are willing to assume relatively high risk in exchange for the possibility of your investments' share prices appreciating significantly, then growth investing might be right for you.

Of course, pursuing a growth investing strategy is compatible with other approaches to investing. You can invest in growth-oriented companies along with value stocks that have more reliable outlooks. That's a smart way to control your risk while establishing a portfolio that performs well over time.