Where is the balance of profits primarily reinvested for growth stocks?

For growth stocks, the balance of profits is primarily reinvested in the firm. This reinvestment strategy focuses on funding opportunities for expansion and development, such as increasing production capability, enhancing research and development, or entering new markets. These actions are aimed at generating higher future earnings rather than distributing profits to shareholders in the form of dividends.

Investors in growth stocks typically expect the company to prioritize reinvestment over immediate returns, allowing for the potential of significant capital appreciation. This sets growth stocks apart from value or income stocks, where the emphasis might be more on returning profits to shareholders through dividends. Investors are attracted to growth stocks for their potential for higher returns generated through reinvested profits that can lead to an increase in the company's market value over time.