What are the disadvantages of growth investing?
What are the disadvantages of growth investing?
The disadvantage is the potential for greater volatility and an increased risk. This is because growth stocks often trade at higher valuations based on their expected future growth, it often means that if companies fail to meet their growth expectations, their stock prices will go down sharply. Growth investing also generally comes with lower dividend yields.
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Re: What are the disadvantages of growth investing?
Growth investing has a risk of high valuation risk, which may result in losses. It is also very sensitive to various trends in the market and that can result in a low dividends.
Re: What are the disadvantages of growth investing?
The primary weaknesses in growth investing are volatility and overvaluation. The stocks may collapse when the prediction fails.