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Growth Investing

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Definition of 'Growth Investing'

Growth investing is an investment strategy, style or paradigm. Investors following this methodology are called growth investors. They invest in companies that show signs of above-average growth irrespective of the fact that the share price might appear expensive in terms of metrics such as price-to-earnings (PE) or price-to-book ratios.

The classic alternative to growth investing is known as value investing.

However, some notable investors such as Warren Buffett have stated that there is no theoretical difference between the concepts of value and growth. He is quoted as saying "Growth and Value Investing are joined at the hip." He continues to say that just investing in one style of stock (e.g. just value investing or just growth investing) could negatively impact diversification.

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