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Strategy
No. 6:
Buy Emerging Growth Stocks
Buying stocks in
emerging companies can be extremely profitable. These
companies tend to fall in the category of mid cap
(mid-sized) or smaller companies. The rewards from
investing in these shares tend to be attractive as many
of these companies are in the service and technology
sectors of the economy, which at times grow at a higher
rate than older manufacturing industries. These
companies generally have more room to grow than larger
established companies. Medium sized companies are also
flexible and can more easily maintain their
profitability.
The downside of
investing in these companies is that mid cap companies
that are still developing their potential are more of a
risk than well established, larger and possibly more
stable companies. Not all of these emerging companies
will fulfil their growth projections. It may also be
harder to exit the market when desired as shares in
these companies may not be in great demand.
Next:
Minimise your Risk
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