Growth Stocks

Growth stocks usually have a high Beta, (coefficient which defines the risk of underlying asset associated with a general market move) thus an investor holding a growth stock must be comfortable with potentially large share price swings of the underlying asset.

The benefit is that Growth stocks have the potential to provide higher returns compared to dividend stocks.

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Dividend Stocks

Dividend stocks are usually mature companies with a proven track record of operations. Given that the company is mature, the upside on these stocks is less then compared to growth stocks which have the potential for astronomic returns. However the dividend provides predictable return to stock holders and in the event of a sell off, dividends usually provide a yield bottom. Thus depending on individual preference, holding either or both types of equities can be utilized.

Here at Bobel Investments we advocate diversity across multiple sectors and depending on the economic cycle will shift between primarily dividend stocks to a pro growth portfolio.