Certified Senior Advisor (CSA) Practice Test

The focus of growth investing is on the appreciation of asset values over time. Investors who adopt this strategy seek out companies that demonstrate significant potential for growth in earnings, revenues, and overall market value. Rather than emphasizing current income generation through dividends or interest payments, growth investors are primarily concerned with the long-term capital gains that can be realized as the value of these companies increases. This strategy involves investing in stocks, often in sectors like technology or biotechnology, where expansion and innovation can drive up stock prices significantly in the future.

In contrast, the other strategies mentioned emphasize different objectives. Income investing centers on generating a steady stream of income through dividends or interest, while value investing focuses on purchasing undervalued assets with the expectation that their market price will correct over time, rather than purely on growth potential. Dividend investing also prioritizes income through dividend payments rather than capital appreciation. Thus, the emphasis on potential appreciation over time aligns specifically with growth investing.