Growth Investing

Growth investing focuses on companies expected to grow revenue and earnings faster than the market average, often paying a premium valuation (a high P/E or P/S ratio) for that expected growth rather than looking for statistically cheap stocks. The bet is that future earnings growth will eventually justify today's higher price.

Growth stocks are typically more sensitive to interest rates than value stocks, because more of their expected value sits further in the future, and higher rates discount those distant cash flows more heavily today. That sensitivity is why growth stocks often underperform sharply when rates rise quickly.