Growth mutual funds
There are thousands of different mutual funds that seek to provide investors with dozens of different objectives. Growth mutual funds seek to invest in companies that are growing their business very rapidly.
Growth stocks sound great and many are, but it is important to remember that this growth you are investing in comes at a cost. The valuations for a growth company, price to earnings and price to book, will be much higher, making a growth stock investment riskier. Over the long term value stocks almost always beat out growth stocks.
However if you are going to buy into a mutual fund devoting a large investment towards a solid growth mutual fund is not a bad idea. Mutual funds invest in dozens of different companies so you will be instantly diversified and you will not have to worry about one or two “bad apples” ruining your portfolio.
Just look for a mutual fund that targets growth stocks, one that has beaten the market the past 3, 5, and 10 years, and a mutual fund that does not have a front or back load. Other alternatives include investing in individual stocks, which is a good idea only if you buy dozens to keep you diversified. And there are growth index funds and ETF’s.