If you are having trouble identifying growth stocks you might like to buy, the reason may be the sheer number of them. One reason the analysts and television pundits can generate interest is because they at least give you a starting point on some stocks they either like or don’t like. Coming up with some of the more obscure stocks on your own that may be winners can be a daunting and time consuming task.
So what about the idea of buying baskets of growth stocks as are sold as ETF’s? Buying an ETF will give you exposure to a group of stocks that supposedly meet your predetermined criteria.
There are two problems I see:
- The definition of “growth” can be very different to each investor and likewise to ETF’s. There are many ETF’s that claim to be growth but might not be depending on your definition of the desired returns.
- The problem now with ETF’s is that like stocks, there are just so many that it is very difficult to narrow down the truly better choices. While there are obviously fewer ETF’s than stocks, the number of ETF’s has exploded in recent years. This makes identifying an ETF that satisfies your investing intentions extremely hard to do.
For a good list of 85+ “growth” exchange traded funds you might check out this website. You can sort the chart many different ways and get some good information that could be useful. Additionally, you can click on each fund to get more information.
There is no doubt that high growth stocks get premium pricing and returns when things are going well. Finding such stocks is something that most investors would like to do but often have a difficult time achieving. Buying a good growth ETF might be the solution for those who don’t have the time, knowledge, or patience to do their own homework. It also gives them a bit less risk than buying individual stocks.
But as time goes on and ETF’s continue to increase in popularity, finding potential growth ETF’s that one would like to buy into is becoming increasingly difficult due to the number of choices. Many of them look very similar, especially when comparing returns year to date. How does one decide one fund is better than another when presented with so many choices? I wish I knew and I bet other investors do as well!