5 lessons growth investors can learn from the Afterpay Touch Group Ltd (ASX:APT) experience

What can you learn from Afterpay Touch Group Ltd's (ASX: APT) incredible journey?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There is never a dull day in the life of an Afterpay Touch Group Ltd (ASX: APT) investor.

One day your product is being tweeted by Kylie Jenner's Kylie Cosmetics and the next it's the subject of a Senate inquiry. One day your share price is down 15%, the next its back up another 15%.

With Gross Merchandise Volume growing at over 200% and a share price that is up 400% in less than two years, Afterpay is one of the ASX's premier growth stocks (Honourable mention to A2 Milk Company Ltd (ASX: A2M), WiseTech Global Ltd (ASX: WTC) and Xero Limited (ASX: XRO)).

Whilst the company is still in the early stages of its journey, there is a lot that investors can learn from this company.

Here are 5 lessons that I think growth investors can learn from the Afterpay experience:

  1. Volatility is real. You've heard it many times, but can you really stomach owning a company that can easily gain or lose 30% of its value in a single day? Stocks, in general, are volatile, but unprofitable high-flying growth stocks like Afterpay are really volatile.
  2. Don't be obsessed with one company, diversify. If you believe in Afterpay's future, by all means, buy its shares and get some exposure. If you don't, then don't buy or even short it. However, do not be obsessed with one company, there so many other opportunities out there. Overexposure to one company, never mind one as volatile as Afterpay, can make you lose a lot of sleep.
  3. Know your game. Don't be a trader. It's quite possible that some professional traders sold Afterpay shares when the price was high and bought again at a lower price during the flash crash over the last few days. That's very difficult for retail investors to replicate and get the timing right consistently.
  4. #HODL. Hold on for dear life. If you do invest in a growth stock early on in its growth phase, hold. The best growth shares go higher and higher over time and can be a real boost for your portfolio.
  5. Think independently. Will regulation slow down Afterpay? Does this company have a moat? Can it take off in the US and UK? Different people have different views on these issues which could have a profound impact on the company's future. Do your research and think independently.

Should you invest $1,000 in Betashares India Quality Etf right now?

Before you buy Betashares India Quality Etf shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Betashares India Quality Etf wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Kevin Gandiya owns shares of AFTERPAY T FPO. You can find Kevin on Twitter @KevinGandiya. The Motley Fool Australia owns shares of A2 Milk, AFTERPAY T FPO, WiseTech Global, and Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Growth Shares

Man holding a tray of burritos, symbolising the Guzman share price.
Share Market News

Wingstop mania hits Sydney — is Guzman y Gomez next in line to soar?

Can Guzman y Gomez be Australia’s next fast food success story on the ASX?

Read more »

A smiling woman sits in a cafe reading a story on her phone about Rio Tinto and drinking a coffee with a laptop open in front of her.
Growth Shares

3 ASX shares for beginners to buy with $500

These shares are highly rated by analysts. Let's see why they could be top picks for beginners.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Growth Shares

Invest $5,000 into these excellent ASX growth shares

These shares could be top picks for growth investors. Let's find out why.

Read more »

three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.
Growth Shares

3 ASX 200 shares that are up more than 30% in a month. Can they go higher?

Are there more gains ahead for these shares? Let's find out.

Read more »

Two people toss papers in the air in joy.
Growth Shares

5 ASX shares for growth investors to buy with $10,000 in May

Analysts are saying good things about these shares. Let's see what they recommend as buys.

Read more »

a man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.
Growth Shares

The ultimate ASX growth shares to buy and hold for the next bull market

Brokers think these shares could be great long term investment options right now.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Growth Shares

3 ASX 200 shares to buy with $1,000

Here are three top picks according to analysts for investors looking at putting their money to work in the share…

Read more »

Suncorp share price Businessman cheering and smiling on smartphone
Growth Shares

3 ASX 200 shares for smart investors to buy

Analysts think these shares could be smart buys this month. Let's find out why.

Read more »