Growth stocks are shares in companies expected to grow at an above-average rate compared to others in the market. These companies typically reinvest their profits into business expansion, research, and innovation instead of paying dividends. As a result, growth stocks often have higher valuations and price-to-earnings ratios. They are commonly found in dynamic sectors like technology and healthcare. While they offer potential for substantial capital appreciation, growth stocks are also more volatile and carry higher risk due to their dependence on continued high growth and external market factors.
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