It is important to do some research on the companies we are investing in. After research either by reading through the annual reports or understanding the management, we often discover different companies have different characteristics. Peter Lynch classify most companies into six categories.

1. Fast Growers

Fast growers are small companies that are growing fast. Growing fast means they are gaining market share faster than other players in the same industry.

2. Slow Growers

Slow growers are large companies that are old, matured and grow extremely slow. The risk is low investing in these type of companies however we do not expect huge returns on these type of companies.

3. Stalwarts

Stalwarts are large, established companies with steady growth. They are not impact much during economic downturns and recession. Being a dividend investor, this is my favorite category.

4. Cyclicals

Cyclicals companies are those that are influenced by cyclical changes. For this ......