Regardless of what investing rules you've used in the past, you'll find that your results can improve by becoming a bit more proactive. Growth stock investing can be extremely profitable, but it's important to focus on the right stocks. By doing that, your investing will be more fun at the same time you're making more money! While you may be tempted to buy a stock based on a hot tip, it's always important to use some simple growth investing rules, rather than guessing which stocks could be tomorrow's big gainers.

Here are three investing tips for better results.

Things You Will Need

Internet access

Step 1

1. Understand the key facts about the company

You should understand the company's business, as it prevents you from focusing on companies that will never demonstrate the kind of growth you want. Neglecting this important step can lead you toward more mature companies that are no longer bringing new products and services to the market. These generally don't provide the best growth opportunities. Newer, more entrepreneurial companies typically deliver the best growth opportunities because they are putting resources into innovation. A quick check of the company's website, or Google Finance or Yahoo Finance will give you some helpful information about the company.

Step 2

2. Know when the company reports quarterly or annual earnings

If you're eying a stock, always know when its next earnings report is scheduled.

A poor report that misses analysts' estimates can send a stock price sharply lower. On the flip side, a better-than-expected report can cause a price to spike higher as professional investors, like hedge funds and mutual funds, grab shares. It helps to use a tool like Yahoo's earnings calendar to check when a company is due to report. That way you are prepared, and you'll be less likely surprised by either good or bad news.

Step 3

3. Track the company's sales growth

As a final point, when you are thinking of buying a stock, don't forget to monitor how fast its sales are growing. This can help you you understand whether its earnings are driven by cost cuts, or by increasing revenue. The latter is the preferable scenario.

Don't omit this key investing step. If you do, you might find yourself owning stocks of companies with diminishing sales, a factor that causes professional investors to sell their shares. When that happens, you will see the price drop.
By following these simple growth investing steps, you can increase your chances of success in the stock market.

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