Whenever the topic of investing is brought up, most people tend to classify themselves into two distinct camps. The first is growth investors who park their money in growth stocks to enjoy capital appreciation. The second are income investors who invest solely to enjoy a steady stream of dividends. But what exactly is the difference between these two schools of investing? And if you are just starting, which type of investing style should you pursue?

The gaudy allure of growth stocks

Growth stocks, as their name implies, refer to companies that exhibit rapid growth in both revenue and profits. Such businesses typically do not pay a dividend or may pay a very small dividend, as they need to reinvest the bulk of their profits to grow the business. As a result, investors who own such stocks typically look for capital appreciation in the form of a higher share price....