Value Investing is a term coined by Benjamin Graham. It is an investment strategy for share market online trading where investors buy stocks that are considered undervalued and have the potential to become profitable stocks in the future.
Warren Buffet is one of the leading investor billionaires who utilised value investing for earning through share market. Investors across the world who are involved in share market online trading have been earning profits with the value investing approach.
Value investing strategy is not about investing in bad companies. Instead, it is all about investing in good companies with intrinsic value that are available at a lower price at a specific time in the market. The lower price may be due to fluctuations in the market conditions or an overreaction of the market to a certain piece of news.
Value investors in share market online trading have a keen eye on these undervalued stocks. It is a proven strategy that lets you earn money when the prices shoot up again soon. To learn more about value investing by Benjamin Graham, watch this video by Practical Psychology on YouTube: https://www.youtube.com/watch?v=7B72GjlKKPY
Here are few tips to start with the value investing approach:
- Check the dividend
Compare two stocks in the same industry with high dividends. Pick the value stocks that give a high yield and invest through share market online trading.
- Warren Buffet Tip
One of the popular Warren Buffet quotes on share market online trading is “Rule No. 1: Never lose money; Rule No. 2: Never forget Rule No. 1." As a value investor, you spend money on the cheapest value stocks to gain more and lose less through trading.
- Share Price analysis
Do a comparison of price to earnings ratio of two stocks you want to invest it. Make the most of the opportunity by investing in the stock with a lower price to earnings ratio.
- Compare the value upon liquidation
For this comparison, choose two stocks and compare its market value with book value. The one with the lowest figure on liquidation is a better stock to invest in for share market online trading.
- Plan as per your goals
Value investors are of different kinds, short-term investors and long-term investors. You can aim to buy stocks that become profitable soon. Or else you can study the cash flows and estimate huge gains in the long-term.
While you can look for more tips from experts online, the bottom line is value investing is all about observation. If you can look at market movements and find stocks priced at a rate which is less than what they are worth, you have gained an edge in share market online trading.
As a new investor in share market online trading, you can utilise value investing strategies for safe trading moves. Once you have gained more confidence, you can take more risks as per your risk appetite for higher returns.
Consult with share market online trading experts at reputed brokerage firms such as Tradebulls to learn more about value investing and other investment strategies. To know more about share market online trading in the equity markets with Tradebulls, you can visit https://www.tradebulls.in/equity-and-derivatives
Curious about value investing, post your questions in the comments section for further discussion.