The Vanguard Information Technology ETF is a large cap focused fund offering exposure to the U.S. Technology sector and really, not much else. If you’re looking for something more broad, you’ll probably want to keep searching. However, if you’re in need of tech exposure within the portfolio, you might be well served to see how VGT can drive a portfolio exponentially higher. In the next few paragraphs, I’ll dive into everything I know about the Vanguard Information Technology (VGT) ETF to hopefully assist you in deciding if this ETF is worth your consideration.

Post Agenda

• Overview of Vanguard Information Technology (VGT) ETF
• Key Features of VGT
• Management Strategy
• Historical Returns
• Pros & Cons of VGT
• Investor Suitability
• Final Thoughts

Overview of Vanguard Information Technology (VGT) ETF

Vanguard launched this Information Technology ETF in 2004 just a few years before one of the worst financial crises in many investors lifetimes. During that unfortunate time the VGT ETF declined by nearly 50% but what it did after that has been absolutely incredible, rocketing higher approximately 1,500%. To put that number into perspective, every $100 dollar investment in 2009 would now be worth somewhere near $1,500! $1,000 invested would be near $15,000, and $10,000 would be $145,000!

Absolutely astonishing results in just 16 years. For comparison, a $100 investment in to SPY at the same time would be about $950. Neither are bad that’s for sure but VGT is substantially above the most noteworthy index available. That index being what most everyone in the world views as the “stock market”.

Vanguard has compiled 324 assets into VGT with their top 10 holdings comprising about 60% of the total assets. It includes large cap companies like Apple and Microsoft but does also include some small and mid-cap companies as well, just to a much lesser degree.

Key Features of Vanguard Information Technology (VGT) ETF

The most important characteristic of VGT that investors should keep in mind prior to investing is that the ETF is strongly technology focused. If you were bullish in the tech sector, then VGT may be a perfect fit. However, if you’re bearish or unsure on the large cap technology space then you’ll probably want to avoid VGT completely. Additionally, technology stocks are known for their volatility and strong sell offs when the market becomes weak.

That said, there are several other characteristics that investors should be aware of. We’ll look at many of them below but, diversification, management strategy, historical performance, volatility, and suitability should all be considered against an entire portfolio prior to committing any capital.

Management Strategy

VGT is a passively managed fund tracking the MSCI US Investable Market Index/Information Technology 25/50. That was a mouthful, so I took a closer look at that index’s fact sheet to see if anything glaring stood out. The Information Technology index from MSCI is designed to capture, in their words, “the large, mid, and small cap segments”. And while that’s true, it is slightly misleading with a substantially heavier weighting to large cap equities. That said, anyone considering an investment here would do well to dig even deeper and understand as much as possible.

Vanguard seeks to fully replicate the MSCI index with VGT by investing in the stocks from that index. Though, in some cases, the fund may select a subset of stocks from the index that best capture it’s key characteristics. This can be good or bad but if history is any indication then I’d personally bet there isn’t much to be concerned over in this regard.

Overall, the Vanguard Information Technology (VGT) ETF has made good on it’s low expense ratio and passive management approach. By leveraging these features against the U.S. Technology Sector VGT has been able to deliver returns that closely mirror the underlying index.

Historical Returns

The Vanguard Information Technology (VGT) ETF has demonstrated impressive historical returns, making it compelling to investors wanting technology exposure. Over the past 2 decades, and investment into VGT would have returned above 1,500% with an annualized return of about 15%.

That said, investors in VGT should be prepared for drawdowns. The fund experienced a -50% maximum drawdown through it’s history and took about 39 months to recover from the decline.

Long Term Growth

Over a 20 year period, VGT achieved a compound annual return of 14.64% with a standard deviation of 19%. Meaning, VGT has demonstrated significant growth but also a higher volatility when compared to more conservative investments.

Recent Performance

Over the past 5 years, VGT has delivered a total return of 194% with $100 invested in 2018 growing to about $294 by early 2025. Reflecting the strong growth trajectory of the Technology Sector during this stellar period.

Yearly Returns

VGT has shown variability in yearly returns over the past 5 years. Again highlighting the inherent volatility within the sector. For example, in 2020 VGT returned 30%, in 2021, 46%, and in 2022 a decline of -29%. Underscoring the importance for a long-term investment horizon.

Dividend Yield

While not a dividend focused fund, VGT does offer a meager dividend yield. Currently, a yield of 0.50% can be obtained. However, for patient investors that yield rose as high as 1.20% during the 2022 decline. Still, a small income that may be reinvested back into VGT to aid potential investors in compounding efforts.

Pros & Cons to Vanguard Information Technology (VGT) ETF

VGT is an increasingly popular ETF for investors seeking tech exposure. However, there are some key pros and cons to consider prior to investing:

Pros

• Growth Potential: VGT is designed to grow at a pace that exceeds the broader market.
• Low Expense Ratio: At just 0.10% VGT is a competitively priced ETF.
• Diversified: While VGT is concentrated in the top holdings, it still offers exposure to over 320 different stocks.
• Reputation & Management: Vanguard is a well-respected financial institution. Known for reliable management and low-cost investment products.

Cons

• Concentration Risk: Over 50% of VGT’s assets are invested in it’s top 10 holdings.
• Low Dividend Yield: A yield generally less than 1%.
• Volatility: VGT is inherently more volatile than broader market funds.
• Market Risk: The technology sector experiences larger drawdowns than broader market funds.

Investor Suitability

Investors should consider carefully their risk tolerance prior to an investment in Vanguard Information Technology (VGT) ETF. The suitability of this ETF will depend on several factors, including risk tolerance, investment goals, and portfolio make up.

Growth focused investors will quickly discover VGT is designed to grow and longer term investors will appreciate the quadruple digit returns over an investment lifetime. Still, the risks cannot be understated. If the market turns sour, VGT will decline precipitously, at least historically.

Considerations into an investment of VGT will likely center around sector concentration and those risks. It’s always advisable to limit allocation to lesser diversified funds but that does limit the upside as well. Perhaps the best approach would be to dollar cost average into the fund until a substantial decline occurred before committing the bulk of any capital being allocated.

In short, VGT is suitable for growth focused long term investors comfortable with higher volatility. Possibly best used as part of a broader investment strategy aimed at minimizing risks and maximizing returns.

Final Thoughts

In closing, the Vanguard Information Technology (VGT) ETF has been an excellent fund within my own portfolio. You can have a look at how it’s performing today within the Unqualified Portfolio. I continue to DCA into VGT waiting for a meaningful decline to deploy the lion’s share of my capital. Still, as of today, I’m more than happy with how it’s going. If you want to check out Vanguard’s website related to the fund here is the Vanguard Information Technology (VGT) ETF page as well.

That said, VGT is not without it’s risks and investors would be well informed to heed that warning. As mentioned, the tech sector kind of reminds me of 3x leveraged ETF’s, in that it explodes higher and lower dramatically given the market environment. Just without the drag on performance of leveraged funds.

Regardless, the proof cannot be ignored, VGT has performed remarkably well throughout the past 20 years and I personally expect that to continue. If they return even half the performance over the next 20 years I’d consider my own investment a success.

Until the next post.

God bless,

Jeff

<p>The post Vanguard Information Technology (VGT) ETF: A Detailed Introduction first appeared on UQinvest.com.</p>

Now, on to discussing these two ETF’s. Are they the same? Is one better than the other?

In the world of ETF’s, SPY v SPLG stand out as two very popular options among investors seeking S&P 500 exposure. They both track the same benchmark but there are some distinct differences that may appeal to different types of investors. In today’s post I’ll be discussing several of their similarities or differences, along with some pros and cons to each ETF.

To begin our debate of SPY v SPLG, here are links to each funds website if you wish to review further.

• SPY – SPDR S&P 500 Trust ETF
• SPLG – SPDR Portfolio S&P 500 ETF

Additionally, here is a link to my Unqualified Portfolio that you may like to view. Currently, I hold SPLG but do occasionally trade in either SPY or the SPY options market. And for those new to growth investing here is a detailed guide I wrote on the topic; Growth Investing 101.

Post Agenda

• SPY Overview
• SPLG Overview
• Key Similarities
• Key Differences
• Expense Ratio Comparison
• Liquidity and Trading
• Risk and Volatility
• SPY Pros & Cons
• SPLG Pros & Cons
• Investor Suitability

SPY ETF Overview

SPY is often referred to as “the spiders” and is among the oldest, most well known ETF’s in existence today. In fact, it has become one of the largest and most liquid ETF’s in the entire world, with unmatched trading volume or liquidity.

SPY is passively managed and aim’s to replicate the performance of the S&P 500 index. The S&P 500 or simply, “the S&P” is a market-cap weighted index of 500 large-cap stocks, representing approximately 80% of the United States stock market.

SPLG ETF Overview

SPLG, in my opinion, is SPY’s little brother. However, in recent years has gained considerable popularity given their lower expense ratio. Essentially, making it a more cost effective option for investors wanting exposure to the S&P 500 index.

SPLG is passively managed and seeks to replicate the performance of the S&P 500 index as well.

SPY v SPLG Similarities

• Both SPY & SPLG invest in the same 500 companies that make up the S&P Index
• SPY & SPLG use a similar weighting ideologies
• Both ETF’s aim to provide investors with exposure to large-cap equities

SPY v SPLG Differences

• SPY is structured as a unit investment trust
• SPLG is structured as a typical ETF
• SPLG has a significantly lower expense ratio compared to SPY
• SPY has considerably higher trading volume compared to SPLG

Expense Ratio Comparison

The most notable difference investors will find between SPY v SPLG is the expense ratio.

• SPY – 0.09% expense ratio
• SPLG – 0.02% expense ratio

The lower expense ratio of SPLG can lead to remarkable cost savings over a long period of time. For perspective, on a $10,000 investment over 10 years (assuming 5% return CAGR) you’ll pay $124 to hold SPY and only $26 dollars for SPLG. Over 20 or 30 years the difference becomes even more pronounced.

Liquidity and Trading

Liquidity is simply the ability to buy or sell. It essentially means there are plenty of buyers or sellers at any given time. Further, highly liquid assets have narrower bid/ask spreads. The bid/ask spread can be explained as, at any given moment, the amount we could buy and sell the ETF for. For example, at 10:30am we may be quoted $605.34 bid to $605.36 ask. If I bought the ETF at the ask of $605.34 and then immediately sold it at the bid of $605.34 I would lose the $0.02 cents. Lesser liquidity would just widen that spread.

SPY Liquidity and Trading

SPY is well known for it’s incredible liquidity.

• SPY has narrow bid/ask spreads
• Ability to execute any size trade without issue
• Very suitable to short term strategies or institutional investors

SPLG Liquidity and Trading

SPLG has ample liquidity for most investors but does trail behind SPY.

• Slightly wider bid/ask spreads
• While possible, less frequently used for short term strategies
• Typically suitable for retail investors wanting to buy and hold

Risk and Volatility

No SPY v SPLG debate would be complete without a volatility or risk comparison. Both ETF’s do track the same S&P 500 index so their profiles are similar. Here is what the recent data suggests.

• SPY volatility – 4.07%
• SPLG volatility – 4.16%

The difference in volatility is almost negligible for most investors and is likely due to tracking or management errors within the fund itself.

SPY Pros & Cons

SPY Pros

• Unrivaled liquidity and trading volume
• Narrow bid/ask spread
• Most popular options market
• Popular ETF that is well known worldwide

SPY Cons

• Higher expense ratio compared to SPLG
• Slightly less tax-efficient than SPLG

SPLG Pros & Cons

SPLG Pros

• Lower expense ratio compared to SPY
• Slightly better tax efficiency
• Suitable for long term buy and hold investors

SPLG Cons

• Lower trading volume and liquidity
• Less popular options market

Investor Suitability

SPY Suitability

SPY ETF is generally better suited to active traders requiring unmatched liquidity or institutional investors moving large positions. Additionally, options traders can deploy every possible options strategy in existence or deploy exotic strategies at will. The options market is among the most liquid currently available.

SPLG Suitability

SPLG is ideal for the long term buy and hold investor wanting exposure to the S&P 500 index. Moreover, SPLG boasts a significantly better expense ratio for investors holding the fund over many years. SPLG has become a favorite among newer investors or investors preferring the more traditional ETF structure.

Final Thoughts

While the SPY v SPLG debate may continue on into the future, it seems clear to me that holding one over the other is mostly trivial and could only be determined by a few factors. If you’re looking for liquidity or a shorter duration investment then SPY is likely preferred. Additionally, since SPY is the most recognizable ETF in the world some of the most sophisticated traders are involved in that market. For a newer trader or investor wanting to cut their teeth with the big boys they really need not look elsewhere. Successful traders in this market can be reasonably confident they’re strategy or system is a capable one.

On the other hand, SPLG is emerging as quite the contender. With retail investors becoming more and more common SPLG has certainly garnered a respectable name across the industry. Should you be seeking a long term buy and hold investment then SPLG is the clear favorite with the lower expense ratio.

In the end, when considering SPY v SPLG the fund you choose will be dependent on what need is most important. Both ETF’s track the same index and as we’ve seen have similar risk profiles. Making the true determining factor for SPY v SPLG, speed vs longevity.

Until the next post

God bless,

Jeff

<p>The post SPY v SPLG: Which S&P 500 ETF is Right for You? first appeared on UQinvest.com.</p>

Let’s turn our attention to growth investing. Every investor has day dreams of one day sailing off into the sunset riding comfortably into their golden years on those Microsoft shares they picked up in 1982. I’m no different and likely neither are you. We invest with the hope one day our diligence will pay off. In this post I’m going to uncover a few nooks and cranny’s that should be considered as you start eye-balling that new boat.

It’s my opinion, growth investing should be the very foundation with which an investment plan is built. Assuming of course you have time still to invest. If you’re already nearing retirement, it certainly isn’t ever too late but their may be additional considerations beforehand. Afterall, investing long term at 63 only to encounter a 2008 style crisis might not be the most enjoyable experience.

In any case, let’s walk through the concepts underpinning successfully investing for growth.

As always, this post isn’t a recommendation but merely a jumping off point as you navigate the always uncertain investment waters.

Post Contents

• What is Growth Investing?
• Revenue Growth
• Growth Investing Rewards
• Quintessential Growth Stocks
• Modern Growth Stocks
• Products & Services
• Income Potential: Zero
• Evaluation of Growth Stocks & The Next “BIG” Thing
• Downside to Growth Investing
• FOMO & Overvaluation
• Volatility Expected

What is Growth Investing?

Of the great many investment philosophies in existence, I would argue growth investing should be near the top of that list. Behind only those ideals necessary to meet a specific investment goal. That said, on a foundational level growth investing can be simplified down to, an investment into a company experiencing rapid growth. Likewise, rapid share price appreciation.

Every company in existence is or once was a “growth” prospect. New companies bring new ideas, better products & services, or disruptive technologies that impact the fabric of our current economic engine. While they may struggle initially with profitability, a key lynch pin to investing for growth is in these companies ability to re-invest and, you guessed it, grow!

Revenue Growth

The lifeline to a growing business is revenue generation. Profitability is indeed a fundamental criteria over the long term but many growth companies forgo short term profitability on their quest for expansion. In doing so, they roll every available dollar, including debt, back into the company as they attempt to scale.

A company experiencing rapid revenue growth is also gaining market share as their products or services gain popularity among consumers. Consider Netflix as it rose in popularity, taking market share from Blockbuster and virtually every other media outlet. Netflix was a growth machine, churning out revenue and subscribers by the millions. A $1,000 dollar investment in Netflix 20 years ago would be a staggering $206,000 dollars today. A classic example of a growth company but also a template for the type of revenue growth investors should seek for future growth investments.

Quality companies offering products or solutions to consumers will inevitably grow. By identifying above average revenue growth an investor can maintain confidence that consumers enjoy their offering. However, revenue growth alone isn’t enough. The company would have to execute a violent and often volatile growth plan as they attempt in-roads in existing markets. Or I suppose, make roads to new markets.

In any case, an effective growth plan and an unwavering management team combined with explosive revenue growth is more than worth consideration. That said, its worth mentioning that the investment landscape is awash with stories of the next great growth company. Every one of which has done an excellent job of marketing their story to the general public as the next Netflix of their respective industry.

Growth Investing Rewards

The rewards for growth investors are plain to see. Investing in growth companies has the ability to 10x, 20x, 0r even much much more as we saw was the case with Netflix. The financial reward from identifying these market unicorns is truly unbelievable. However, I’ve heard it said that the probability of winning the lottery is higher than finding, investing, and holding onto shares of such a company.

Outsized returns, rapid corporate growth, and a trajectory nearing the stratosphere are all key identifiers to a successful growth investment. Identifying and investing early could be the difference in setting sail into the sunset or just sitting on the dock. Either is probably great but catch the next Netflix and you’ll see what I mean.

Quintessential Growth Stocks

While it isn’t easy to find the next great growth investment there are a few characteristics these companies share. They may serve as useful tools in an investors attempt at finding that next great investment.

• Operate in a new or innovative market.
• Products or services that solve real problems.
• Extraordinary revenue growth.
• Outsized spending on research, development, or marketing.

I would encourage you to notice that the most successful companies aren’t built on greed, which is ever present in corporations today. No, success is built on progress. Companies experiencing these characteristics are not by accident, collectively they’ve decided this is the way. They consistently seek and scale new avenues into the market. Bringing with them the products and services we may not even yet know we need.

Before we move on, I thought it would be great to see a few of the most notable growth stocks of all time and what a $1,000 dollar investment 20 years ago might look like today. We’ve already considered Netflix but there are plenty of other success stories. Additionally, here is a cool calculator that let’s you examine these companies based on another amount or year.

1. Netflix – $206,000
2. Microsoft – $23,413
3. Nvidia – $745,177
4. Apple – $353,070
5. Amazon – $89,630

Almost surprising to see how low Microsoft is on that list. I guess they experienced the bulk of their growth during the personal PC boom of the 90’s. Still, any of these investments are way above average and finding just one is likely to alter your financial future immeasurably.

Modern Growth Stocks

I’d be remiss if I moved on without discussing the current investing landscape. While the last section may be fun to look at an consider what life would be like had we corralled one of these whales. The reality is finding the next Amazon is not an easy task. Right now, there are teams of people scouring every conceivable data point(or having the latest ChatGPT iteration do it) to find that next big mover.

In reality, these companies themselves have grown so large they’re now more like ETF’s than individual companies. Consider Microsoft, if they were so inclined could easily break up their company in to many smaller companies. They might have a company for cloud services, another for gaming, still another for software or hardware and the list goes on. In every one of those instances, they’re still likely the leader in that respective field and if they aren’t, they have the resources to “bully” or buyout those that are.

Which means we must look at the investing picture a little differently. I’m not saying other currently unknown companies won’t one day achieve this level of success, I’m simply saying these companies are large. Meaning, they, at least currently, have an outsized level of control in the market. Not only do they command the most investment dollars for their shares, they also command the physical market with their products or services.

In that light, following these behemoths and there up and coming projects may just be akin to growth investing, nested in a former growth stock. As an example, one may consider Nvidia. A company that was founded over 30 years ago and largely rose to prominence in the 90’s & early 2000’s. Yet, look at the level of growth they’ve experienced in the last 10 years, well after they’re growth years. It’s certainly food for thought and more than worth a look if you’re considering a growth investment.

Products & Services

If revenue is the lifeblood of a growth stock then their products or services are the heartbeat. One doesn’t happen without the other. Make a world changing product and the revenue will come, this much I’m sure. Still, it isn’t uncommon for a growth company to try and repurpose old ideas as the latest wave of change. Further complicating an investors chances at finding a terrific growth asset.

As it relates to the tangible offerings of a company, it’s important to identify a few common characterisics.

1. Does the market have a need?
2. How far reaching is that need?
3. Does the product or service differ meaningfully from currently available offers?
4. Is the product or service priced appropriately for significant growth?

Should the product or service actually be useful on a large scale would eliminate thousands of possible companies immediately. As most, just don’t offer anything groundbreaking or that can’t be acquired elsewhere. Further, if the product or service provides no use to other regions then they could also be eliminated from consideration. Lastly, if the product or service isn’t priced appropriately that barrier may prove too high a bar for the product to ever grow it’s wings.

In all, these are just a few more considerations a potential investor must weigh carefully before committing their relatively limited investment capital.

Income Potential: Zero

As you may have surmised from my Dividend Investing 101 or my Income Investing 101 posts, I’m encouraged by a consistent income stream from my investments. However, growth investing should absolutely not be offering much, if ever any, dividends. As investors, we should probably demand this from that portion of our portfolio. We want our growth assets to do what they’re intended to do, grow. Returning any of that capital to us as shareholders in the form of dividends would be counter-intuitive.

Moreover, many companies elect to buyback shares in lieu of a paying a dividend. I also believe this would be a detraction from a solid growth company. Generally speaking, when a company cannot identify any better use for their capital, they return it to shareholders. Typically a positive aspect of investing. However, growth focused companies should be scaling up at every turn, increasing outflow so that inflow follows. Any less than growth would categorize the asset in some other way.

Evaluation of Growth Stocks & the Next “BIG” Thing

Far and away the most difficult aspect to growth investing would be finding what the world believes is a ground shaking new product. In our own lives that new iphone may be revolutionary but would they agree in Japan or Africa. Difficult to know. In hindsight, it’s clear to see that yes the iphone was a revolutionary product when it first arrived in 2008. Prior to that, we had never experienced touch screen technology or the convenience of having a computer in our palm.

For me, rather than attempting to identify the next life changing device I prefer to hold a basket of ETF’s that will more than likely hold the next “BIG” thing. I wouldn’t achieve the life changing rewards inherent to the biggest winners but my portfolio would grow. A respectable trade off between the work of finding that unicorn and capitalizing on it’s growth.

In either scenario, an investor would be rewarded but for those few but shrewd among us. Finding that next product or service offering the world just can’t live without would certainly reap an outsized reward.

To evaluate a growth stock, probably the most logical starting point would be to identify those aspects that would eliminate an investment from consideration. Truly not an exhaustive, these questions may curate a respectable list of potential investment opportunities.

As a side note – much of the minutia can be whittled away quickly using an investment screener similar to the one found at Finviz.com. It isn’t a replacement for due diligence but does lighten the burden in our busy lives.

1. Do we need the product or service?
2. Does that need address a large enough market?
3. Are there any competitive advantages to this product over another?
4. Do the financial statements align with what we know of previous growth companies?
5. Is the company increasing market share and revenue?

Once a list of possibilities is concluded an investor may wish to move on in an examination of qualitative factors relating to the company or it’s products. Possibly, culture, management, intellectual property, or business strategy to name a few. Any of which would prove valuable to an investor and the company alike.

Downside to Growth Investing

Few if any aspects of investing are as challenging as finding that next great stock. Income investing, dividend growth investing, or even day trading can return rewards quickly. To succeed in growth investing is similar to throwing darts at a dartboard 100 yards away. The board is barely visible and wind, rain, or even birds may interrupt the darts trajectory. Making growth focused investments incredibly risky. They occupy valuable capital that could be utilized elsewhere for most of a lifetime.

Next, is the all too common practice of lofty valuations. Investor logic has largely left the building on this front as companies like Nvidia race ever higher, regardless the fundamentals that traditionally chart an assets course. It isn’t uncommon for an investor to hear the hype and invest just before the fall. There is never a guarantee that a terrific growth story, even such as Nvidia, won’t begin to stall.

In the end, my opinion is, the greatest detriment to growth focused investors remains the opportunity cost of chasing these darlings. If you’re seeking eye-watering returns then you’ll have to stay committed even as the world falls to pieces.

The cost of committing to an asset for 10, 20, 30 years or longer means never being able to put that money to work elsewhere. Especially considering that most companies don’t ultimately become Amazon or Netflix. No, just the opposite is true as most become 3D Systems Corp. (DDD) A company I believed was the next big growth stock as 3D printers entered the mainstream. Goes without saying, I was wrong.

FOMO & Overvaluation

FOMO, or fear of missing out isn’t a new phenomenon but rather a new acronym for us as humans. A popular anecdote amongst investors is the tulip mania bubble that occurred during the 1600’s. Where speculation or FOMO, drove the value of tulip bulbs to an extreme valuation. As you can see, where any market exists, humans wrestle with the emotion of missing out. In truth and more often than not, by the time we learn about the value of a “tulip bulb” the market is nearing it’s peak. Making FOMO a pitfall all investors must be on the lookout for.

The next step in FOMO is the dramatic price increase, often an overvaluation of the asset in question. In the above example, tulip bulbs are said to have reached a valuation 5 times an average person’s salary. To translate that, the average annual salary in the US today is $59,000. Resulting in the price of a tulip bulb nearing $300,000!

Overvaluation has become a truly concerning aspect of the modern stock market. With many assets trading well outside their inherent values. Consider the magnificent 7 (Mag 7) of Google, Apple, Amazon, Meta, Nvidia, and Tesla. Combined, they blanket the indices designed to track the state of the market. Making it even more difficult for the average investor to ascertain a market pulse. With such a determination being critical for a growth investor determining when to invest.

Volatility Expected

As you’ve probably gleaned from most of this article growth investing comes with an outsized measure of volatility. Volatility as it relates to growth can be summed up in this way, you may well make and lose a fortune many times over. All but a comfortable ride and one that I’ve experienced the loss side of more times than I’ll ever admit. Still, an investor traveling through these waters needs to know what they’re in for.

As these new companies push the boundaries of societal norms, they will inevitably experience some push back. Often, nay always resulting in volatility to the share price. Failing to stay the course is similar to my investment of Apple back in 2014. After making a few thousand dollars I moved on thinking the price was overvalued. Temporarily I was proved right as the price declined nearly 20% shortly after. However, as I quickly learned that was expected volatility and an investment that would have paid for a house as of today’s valuation.

Final Thoughts

At the end of the day, determining whether growth investing is the right fit for you depends on your goals and risk tolerances. Investing in this space takes, in my opinion, remarkable courage and foresight. The likes of which most don’t possess, including myself. For this reason, I’ve chosen to invest in several different ETF’s that either hold or will eventually hold these incredible growth stories. I may indeed sacrifice stratosphere level returns but I also alleviate extreme volatility from my portfolio which isn’t to be quickly discounted.

At it’s foundation, growth investing is about finding, investing, and holding those truly transformative companies BEFORE everyone knows who they are. With a watchful eye and an enjoyment for research and study finding a successful candidate is achievable. Still, it’s important to also be on the look out for detractors such as FOMO, overvaluation, or meaningless hype. People and companies alike have an uncanny ability to oversell and under deliver on the promises they make.

Until next time.

God bless,

Jeff

<p>The post Mastering Growth Investing: High-Potential Investment Selection first appeared on UQinvest.com.</p>