Equity funds are classified by their style. They are either value or growth. With growth funds, managers are looking for companies with a history, or even just the potential of having strong growth in factors such as profits, (called earnings), sales and cash flow.
After all, if those indicators continue to grow, then so should the stock's price. Look up a good growth mutual fund symbol and follow. Growth mutual funds try to focus on companies experiencing significant earnings or revenue growth, rather than companies that pay out dividends.
Growth mutual funds tend to look for the fastest-growing companies in the market. Growth managers are willing to take more risk and pay a premium for their stocks in an effort to build a portfolio of companies with above-average earnings momentum or price appreciation.
In general, growth funds are more volatile than other types of funds, rising more than other funds in bull markets and falling more in bear markets. Only aggressive investors, or those with enough time to make up for short-term market losses, should buy these funds.
If you are looking for quick money with no risk, growth mutual funds are not for you. This types of fund may invest for long-term capital gains and is not intended for an investor who seeks income.
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