Value investing is a strategy focused on identifying and investing in undervalued stocks with strong long-term potential. Rooted in the teachings of Benjamin Graham, value investors like Warren Buffett and Charlie Munger seek stocks priced below their intrinsic value due to market inefficiencies. These undervalued opportunities often emerge after market corrections, where solid companies are temporarily overlooked.
Value investors prioritize intrinsic value, aiming to buy stocks with a margin of safety. This buffer protects against market fluctuations. This strategy requires patience, as investors hold onto these stocks, allowing time for the market to recognize their true worth.
Key principles of value investing include fundamental analysis, focusing on financial health, and understanding competitive advantages. By maintaining a long-term perspective and diversifying their portfolios, value investors can build wealth over time, mitigating risk while capitalizing on potential market corrections.
Value investing isn’t about chasing quick profits; it’s about disciplined, informed decision-making to achieve steady, sustainable growth.
Sven Franssen