An Overview of Value Investing and Its Core Strategies

Value investing is one form of approach wherein undervalued assets such as stocks trading at a lesser value than intrinsic value are purchased. The essence is to acquire those stocks cheaply and have a long holding period, considering the fact that eventually, the market will rediscover their correct values. Three primary principles include estimating intrinsic value, maintaining a margin of safety, and ensuring that it\'s a company in good health. The most common approaches are contrarian investing, deep value investing, and dividend value investing. Despite the numerous rewards from value investing, it does come with potential risks such as falling into a value trap, long periods of holding, and economic slumps. The perfect example of successful value investors is Warren Buffett and Benjamin Graham.