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Value Investing

Value Investing is an investment strategy, for which investors like to buy:

  • Near book value – total assets minus intangible assets (patents, goodwill) and liabilities

  • Low valuation ratios – e.g. P/E ratio, which compares the current price of company’s shares to the amount of earnings it generates

  • High dividend yields – ratio of company’s dividends to its share price

Value Investing is the opposite of Growth Investing.

My Take

Portfolios should be constructed with a balance between value and growth securities.

References

Investopedia – Book Value
Investopedia – Investment Valuation Ratios

Technical Analysis

Net Worth