Guide to Mastering Value Investing: Strategies & Tips

Want to buy stocks for less than they’re worth in the stock market? This guide to value investing is for you. Learn the strategies, tips and metrics to master value investing and make smarter decisions.

Key Takeaways

• Value investing is about buying undervalued assets based on their intrinsic value, using fundamental analysis.
• The metrics to look for in value stocks are P/E below 14, P/B below 1.0 and positive free cash flow.
• Value investing requires a long-term commitment and a patient approach, diversify your portfolio, avoid value traps, and have a margin of safety for the investor.

What is Value Investing

Value investing is an investment philosophy that means buying assets at a price lower than their intrinsic value. Simply stated, the main pillar of value investing is to buy assets for less than they’re worth and to capitalize on market inefficiencies that misprice securities. This requires a deep understanding of a company’s intrinsic value which is determined by financials, company performance, and fundamental factors. Value investors prioritize intrinsic value when…