In mutal funds i found two options, one is Growth Option and the other is Divident option. Can anyone please explain the difference between growth and divident options.
2007-03-11 18:53:57 · 2 answers · asked by rahul z 1 in Business & Finance ➔ Investing
Dividends are paid out by stocks, since you are a part owner in the company. A dividend-based approach is for older, stable companies to return wealth to the owners, since large-scale growth isn't likely.
Growth stock is one where every penny of earnings is re-invested in the corporation to expand. A growth stock is generally a newer, probably technology company. It has a lot more upside potential, but also some downside.
A dividend option is safer, but will have less returns on your money. Think about how much risk make you feel comfortable.
2007-03-11 18:59:57 · answer #1 · answered by John T 6 · 1⤊ 0⤋
Growth investing is when the company is taking the surplus cash it has at the end of the quarter or year and invests in itself to grow the ability to make more money.
Dividends are what companies pay to share holders when they have a surplus of cash at the end of the quarter or year because they find that growing would only cause them more harm by flooding the market with too much supply.
Hope that helps.
2007-03-12 02:00:21 · answer #2 · answered by gamma_maker 2 · 0⤊ 0⤋