Growth type investments generally place your savings at greater risk, that is, they are not as safe as Fixed Income investments. People who invest in Growth investments accept that there is no guarantee their savings will be returned or that their savings will even earn an income. When you purchase a Growth investment you are typically acquiring an ownership interest in the company selling the investment.
For an investment to be categorized as Growth, the investment will
- not have a maturity date, where the investor’s capital is returned to them
- not have a regular payment of income that is legally enforceable by the investor
- not have any guarantees by the issuer on the monies invested
Most investments can be bought and sold in a financial market (stock market, bond market, etc.) and their market values are constantly changing. The market value of a Growth investment will fluctuate depending upon
- the issuer’s profitability
- the economic, business and investment environment, and
- the popularity of the issuer’s industry with investors
Note: A Growth investment may or may not pay an annual income, but the payment is at the discretion of the issuer and, as such, the investment’s annual income payments can be increased, decreased, or eliminated at the issuer’s discretion.
The following table outlines the different types of investments in the Growth investment type category:
Investments in each category