Investment strategy uncovered: Getting to grips with value investing

Julie Brownlee, Fsp Invest, 26 Aug. 2015

Tags: value investing, what is value investing, value investors, how value investing works, investment strategy, investing,

There are many types of analysis that investors follow. Some stick to one method religiously whilst others use a variety of different techniques.

One investment strategy that can reward you handsomely over the long-term is value investing.

So what exactly is value investing? And how can you apply this strategy?

Read on to find out…

What is value investing?

Value investing is all about buying a company for far less than it is worth. This investment strategy involves a lot of patience and discipline, and it’s certainly not a get-rich-quick way to invest.

You need to practice various techniques to value stocks, buy the best you find and wait. And sometimes you need to hold onto stocks for a very long time.

Value investing is a form of fundamental analysis.

How value investing works

If you want to give value investing a go, you need to scrutinise companies to find out what their intrinsic value is. This involves determining what each part of a business is worth.

Value investors are big fans of financial ratios. They use these to whittle down the companies worth investigating further.

A value investor may start off using ratios like the price earnings ratio and the price to book value ratio. If these are low, a company could warrant a further look.

Value investors tend to focus on unpopular companies, hated by investors. By conducting thorough research and analysis, they hope to find hidden gems.

From this, they invest in the companies that make the grade. Then they wait. Value investors hope that in time the stock market will recognise the value in the company and the share price will reflect this.

When this happens, the share price will start to soar and value investors make a tidy profit along the way. This is the strategy used by Warren Buffett and his mentor Benjamin Graham.

Value investing requires a lot of guts and a lot of patience, but it can be very rewarding.

So there you have it. Getting to grip with value investing.

*********** New release ************

If you’re familiar with Fast-track Millionaire, you’ll love THIS

If you’re one of my Fast-track Millionaire readers, you’ll know I have some brilliant business ideas (if I do say so myself). You’ll also know that I started some of these businesses myself with great success. Others, I’ve sourced from the best and most successful entrepreneurs I’ve ever met.

But then… the Fast-track Millionaire canvas just wasn’t big enough for all my ideas, so I wrote a book!

Click here to find out how to get your copy…


Related QA

d.c.heger asked:
MY QUESTION IS – I bought Bitcoin & Etherium some time ago – at first they grew nicely but now they are lower than what I paid for them. Should I [read more]
Published at 04 Apr. 2018 in: Investing 5 shares due to rocket 1 Answer
kavesh.maharaj.73 asked:
Hi Josh. I would like some advice on TFSA. I can get an interest rate of 7.8% nominal at a bank if I invest the R33k upfront in a fixed deposit [read more]
Published at 19 Mar. 2018 in: Investing Tax free savings vehicle 2 answers
kavesh.maharaj.73 asked:
Hi Josh Quantum wants to buy back shares from shall investors at what I think is a low price of around R3.86. You tipped the share in February [read more]
Published at 14 Mar. 2018 in: Investing Real wealth 5 answers
elizastrydom asked:
Hi Timon I am interested in registering for your Red Hot Storm Trader service. I am already a Red Hot Penny Shares investor. My question is [read more]
Published at 28 Feb. 2018 in: Investing Trading platform and broker 1 Answer
ManuE asked:
I have an interest in investing in Bitcoin, I just don't know how. If I buy Bitcoin with R15 000, how much can make (Return On Investment)? [read more]
Published at 25 Feb. 2018 in: Investing Investment 1 Answer

Related articles:




Youtube Twitter Facebook

Connect with us:    

  • Accelerated Investor