Growth stocks are shares of companies investors believe are poised to grow faster than the industry norm. These stocks present a chance for higher gains but come with higher risks. They also tend to rise quickly when the market is on an upswing and fall fast when the market falters. In addition, because these companies are looking to grow, they often don’t hand out dividends.
Note that a growth company’s stock is not always classified as growth stock. In fact, a growth company’s stock is often overvalued.