There are many ways one can invest. We choose to use Value Investing when we invest. Here are some of the characteristics of Value Investing.
- Irrational Market
We believe that the market is made up of irrational investors. Hence, the prices traded on the stock market do not accurately reflect the true value of a stock.
A stock may be underpriced or overpriced mainly due to its investors’ sentiments, which brings us to the next characteristic.
- Intrinsic Value
As value investors, we believe that every stock has its intrinsic value. This is the true value of the stock and it is not related to the price that it is currently trading at.
We aim to look for stocks that are trading at a price below its intrinsic value. Pretty much like going into a store to look for items sold at a bargain.
If our research and analysis are done right …