Consistently beating the stock market's returns in the long-run is a very difficult task to achieve.
It's something that very few investors can actually claim to have accomplished, save for a few notable people like Warren Buffett, Benjamin Graham or Peter Lynch.
In fact, even most fund managers have struggled to do it consistently over the years, despite their superior research tools and industry contacts.
Of course, there are a few notable exceptions like Perpetual Limited (ASX: PPT), BT Investment Management Ltd (ASX: BTT) and IOOF Holdings Limited (ASX: IFL)) which all boast strong track records for beating the market, but as a rule, it is a feat accomplished by very few.
And yet it remains the goal of every individual investor out there. To recognise superior returns and fast-track their way to a wealthier future.
'So how can an everyday investor possibly achieve something that even the professionals can't?' I hear you ask.
Again, I'm not going to pussyfoot around it. Beating the market is no easy task…
But you do have a number of advantages that the professionals don't
For instance, most fund managers are motivated to perform in the short-term. They have to deliver profits, after all…
In comparison, the individual investor is likely to take a much longer-term view, giving you the advantage of time.
Secondly, the professionals are often restricted to investing in blue-chip companies, such as Commonwealth Bank of Australia (ASX: CBA) and Woolworths Limited (ASX: WOW), as well as others listed on the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO).
You, on the other hand, have a much broader playing field and can invest in smaller companies with plenty of growth potential. And that's what I wanted to show you today…
I want to draw your attention to three growth stocks that I believe could beat the market's returns over the coming years.
Each appear to be trading at reasonable prices and could be excellent pickups for investors who buy now.
1) Greencross Limited (ASX: GXL). Dogs and other animals are increasingly becoming 'part of the family' and Greencross, a provider of veterinary services, is in the box seat to benefit. The company is rapidly expanding across Australia while its position in the Western Australia market will be strengthened by its recent acquisition of City Farmers.
2) Veda Group Ltd (ASX: VED) is a data analytics company set to benefit from stricter credit reporting standards and the low interest rate environment. Its shares have dropped considerably in recent months, giving you an excellent opportunity to pick up shares at a discount.
3) Select Harvests Limited (ASX: SHV) is an Australian almond producer. It was one of the market's top performing stocks through 2013, but its price has retreated this year due to weather conditions affecting its crop. However, demand for almonds should continue to climb steadily thanks to a drought in California (the world's largest producing region) as well as changing consumer health trends.
While I can't give you any guarantees of future performance, I can tell you that I already own shares in Veda Group while the others are sitting firmly on my watchlist and could well make for my next acquisition target.
Alternatively, The Motley Fool's top advisors have also uncovered another small-cap stock with fantastic growth potential which is well worth checking out.
