When the stock market is in a slump, I personally think that buying growth stocks is a smart play. Due to the fact that such companies have volatile share movements, some can get oversold quickly during periods of uncertainty. So given the fact that both the FTSE 100 and FTSE 250 fell over 1% on on Friday, here are the top growth stocks that I’m thinking about buying.
Drive to thrive
The first company I’d consider is Aston Martin. The reason why I tag this as a growth stock is due to the strategy refresh the brand had in 2020 when Lawrence Stroll took over. His five-year plan to exponentially grow revenue and profitability is under way, albeit with the blip of the pandemic. 2021 results highlighted that revenue jumped 79% year-on-year. This cut the pre-tax loss significantly from 2020’s £466m to £213.8m.
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I think it’s a high-risk option though, given that the share price is down 56% over the past year. Yet the rewards could also be high if the next three years go to plan. To try and reduce my risk, I’d diversify my money by investing £100 here but ensuring that I also invest £100 in three other growth stocks.
Benefiting from market volatility
Two growth stocks from the same sector that I’m also thinking of buying are CMC Markets and IG Group. These two stocks both service retail investors, allowing access to trading platforms to buy and sell a range of financial products.
Growth can be seen in the new accounts opened during the pandemic, when retail investing really attracted attention. I was disappointed with both half-year results in 2021, when a lack of volatility in the markets meant earnings missed expectations.
However, I think the picture is changing. Markets are choppy at the moment due to the war in Ukraine, high inflation and high commodity prices. This should help raise income this year. Further, both growth stocks are investing for the future. For example, CMC is opening a new office in Manchester, with IG Group investing in Singapore.
An unusual growth stock
The final stock I’d consider with £100 is HarbourVest Global Private Equity. This isn’t a conventional choice, but one that I think could do well.
The share price should reflect the net asset value of the private investments that company makes. Most of these are in unlisted stocks. This gives me access to different types of businesses that HarbourVest think offer good value. As these aren’t publicly traded, there can be large growth opportunities if good deals are struck.
However, I need to be aware that the share price doesn’t always correlate to the net asset value. If the share price is higher, I could lose out as I’m paying a premium for the actual value of the investments. Fortunately, at the moment the share price is at a discount.