Lux Investing
What are the advantages and isadvantages of investing in a growth or income stock?
I have to write an essay for my Personal Finance class. I am writting about McDonald and Burger King. For one of my paragraphs I have to Comparew and Contrast the companies' stocks by explaining the advantages and disadvanteges of investing in a growth or income stock. I have no clue what a growth or income stock is or their advantages or disadvantages are. I can't find anything on the internet about it. So can you please answer my question and if possible write a website that I can site that I got my answer from.
Public Comments
- Growth stocks are a bit of a swindle. The expectation is that the corporations you are interested in will continue to do well for the foreseeable future, so it becomes worth more, so its shares become more valuable. They do not pay dividends, unless something extraordinary happens. Income stocks aren't intended to appreciate in value like growth stocks. Instead, they will occasionally or periodically have dividends paid to the share owners from a portion of the corporation's earnings. The price-earnings ratio of a stock helps you determine if the size of the regular dividends (sometimes there are extras, and sometimes dividends are not paid) compared to the current value of the stock on the open market makes it a tempting buy. Common stocks have voting rights. Preferred stocks will pay their dividends before common stocks will, but they typically have no voting rights. Growth stocks: Big time gamble / speculation Income stocks: Lesser gamble, but no stock investment is guaranteed by any government agency and may lose value or even become worthless.
