Jasmine Birtles
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What is Growth Investing and Is It The Right Strategy For You?
Ruby Layram
26th Mar 2026
If you’ve spent any time reading about investing, you’ve probably come across the term growth investing.
But what does it actually mean? And more importantly, is it a strategy you should be using?
In this guide, we’ll break down the growth investing meaning, how it works, and whether it’s the right fit for your goals in 2026.
What is Growth Investing?
Let’s keep it simple. Growth investing is a strategy that focuses on buying companies expected to grow faster than the overall market.
Instead of looking for cheap or undervalued stocks, growth investors look for companies with:
- Strong revenue growth
- Innovative products or services
- Expanding market share
- Big future potential
These are often companies that are reinvesting profits back into the business to fuel expansion, rather than paying dividends.
Growth Investing Meaning
If you’re still wondering about what growth investing looks like, think of it like this:
You’re investing in companies today because you believe they’ll be much bigger and more valuable in the future.
It’s less about what a company is worth now, and more about what it could be worth in 5–10 years.
It’s a great strategy for long-term investors and investing on behalf of your children.
Examples of Growth Investing
Growth investing often focuses on sectors like:
- Technology
- Artificial intelligence
- Renewable energy
- Healthcare innovation
Think of companies that:
- Are changing industries
- Are scaling quickly
- Have strong long-term potential
These are the types of businesses growth investors are drawn to.
How Growth Investing Works
The idea is simple:
- Identify companies with strong future potential
- Invest early (or before major growth happens)
- Hold your investment long-term
- Benefit as the company grows and its share price increases
Unlike income investing, you’re not relying on dividends.
Your returns come mainly from capital growth (i.e. the share price going up).
Pros of Growth Investing
Potential for High Returns
Growth stocks can outperform the market, sometimes significantly.
Exposure to Future Trends
You’re investing in industries shaping the future (AI, green energy, tech).
Compounding Gains
If you hold long-term, your returns can compound over time.
Cons of Growth Investing
Higher Risk
Growth stocks can be volatile, especially during market downturns.
No Guaranteed Returns
Not every “high-growth” company succeeds.
Often No Income
Most growth stocks don’t pay dividends, so no regular income.
Growth Investing vs Value Investing
You’ll often hear growth investing compared to value investing.
Here’s a quick breakdown:
| Growth Investing | Value Investing |
|---|---|
| Focus on future potential | Focus on undervalued stocks |
| Higher risk, higher reward | Lower risk, more stability |
| Often no dividends | Often includes dividends |
| More volatile | More stable |
Neither is “better”, they just suit different types of investors.
Is Growth Investing Right for You?
Growth investing isn’t for everyone, and that’s okay.
It tends to suit people who:
- Are investing for the long term (5+ years)
- Are comfortable with market ups and downs
- Want higher potential returns
- Don’t need regular income from investments
It might not be ideal if you:
- Prefer stability
- Need consistent income
- Feel stressed by market volatility
A Smarter Way to Use Growth Investing
Here’s something many beginners don’t realise:
You don’t have to go “all in” on growth investing.
A more balanced approach is to combine it with other strategies.
For example:
- Core portfolio (global ETFs)
- Smaller portion in growth stocks or funds
This way, you get:
- Stability and growth potential
Common Mistakes to Avoid
If you’re thinking about trying growth investing, watch out for these:
- Chasing hype stocks without research
- Investing based on social media trends
- Panic-selling during dips
- Overloading your portfolio with risky assets
Growth investing works best when you stay patient and think long-term.
Final Thoughts
So, what is growth investing?
It’s a strategy focused on backing companies with strong future potential, and holding them long enough to benefit from that growth.
It can be powerful… but it’s not without risk.
The key is understanding:
- Your goals
- Your risk tolerance
- How growth investing fits into your overall plan
Want to Learn How to Do This Properly?
If you’re reading this and thinking:
“I like the idea of growth investing… but I’m not sure where to start”
That’s completely normal.
This is exactly what we cover inside the MoneyMagpie Invest course, a step-by-step guide that shows you:
- How to find strong investment opportunities
- How to build a balanced portfolio
- How to invest with confidence (without second-guessing everything)
It’s designed to take you from saving money to growing it strategically.
Disclaimer: MoneyMagpie is not a licensed financial advisor. This article is for informational and educational purposes only. Investments can go down as well as up, and you should always do your own research before investing.
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