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Imagine turning a modest investment into a mountain of wealth. This isn't just a dream for those who stumbled upon stocks like Apple in the early 2000s or Amazon in the late 1990s. It's the power of growth investing, a strategy that can transform portfolios and lives by capitalizing on the potential of high-growth companies.

Growth investing attracts those who seek more than just steady dividends; they're after substantial returns that outpace the market. This strategy focuses on companies expected to accelerate their earnings at an above-average rate compared to others in the market. However, not just any stock can be considered a growth stock. These are typically companies at the cutting edge of technology, revolutionizing not only their sectors but sometimes the way we live.

According to a report from J.P. Morgan, growth stocks have outperformed their value counterparts by an impressive margin over the last 15 years. This statistic highlights the allure and potential impact of growth investing on an individual’s portfolio.

Despite the attractive returns, diving into growth investing without a solid understanding of its fundamentals is like navigating a ship in stormy seas without a compass. The risks are high, but the rewards? They can be truly transformative. Understanding the characteristics that make up a successful growth stock is not just useful—it's crucial for success.

1. Understand What Defines a Growth Stock