The modern investor is wise and also prudent, after suffering through a global economic meltdown such as has been the case in recent history. It is important to find wise investments that generate capital appreciation with a substantial gain. Nobody wants to lose on the market. Everyone is looking for some profit generating investments.
A new trend in investing is to look for emerging growth funds. The role models for making the big capital gains, is Warren Buffett and other financial wizards and investor legends. However, most small time investors will not reach those levels of success; but, can make a decent profit when they look into emerging growth funds.
Emerging growth funds such as Turner Emerging Growth is an excellent example of investments in common stocks and equities and other securities of small American Companies with good growth potential. In the grand scheme of things it is good to rely on a proven master of emerging growth funds such at Turners to seek out the best growth potential companies on the market. However, the Turner fund is not open to new investors at present; but, there are other emerging growth funds which are.
Morningstar for example, tracks the record of small small-cap gains funds and by keeping up with their reporting; investors can find emerging growth funds that appeal and work best for them.
Choosing the right emerging growth funds is a complicated matter. There are many factors to consider. For example, a company can appear to be growing faster than the sector that it is in. This inflated value could be due to acquisitions and other financial decisions, or its actual or organic growth is far less than reported.
Investors would also want to look into companies that can produce double-digit growth rates. There are several types of companies doing well in the double-digits. Energy companies are good for producing double-digit growth and so are healthcare companies. Since the trend to outsource is catching on, the large pharmaceutical companies are now employing clinical research companies to do the clinical trials for them. These research companies are emerging growth funds. On the other hand, the time to sell stocks already purchased is when the company is not performing as expected. Key factors to look for are company expansion, unit growth, the comparative sales of other companies in the same sector and margin stability. For example, if a company planned to open 10 new stores, but fell short of their goal, this may be an indication that their growth potential has stagnated, or something within the infrastructure may be hindering their projected growth potential.