Graham's Long-Term Winning Approach for Enterprising & Defensive Investors

by Cara Scatizzi

Value investing has proven itself over time to be a highly successful investment approach. And while success has many fathers, Benjamin Graham is certainly one of them. In this case, father really does know best.

Grahams approach focuses on determining the intrinsic value of a stock, which takes into consideration the firms earnings, tangible assets, dividends, financial strength and stability. He believes investors should buy stocks whose prices are close to their intrinsic value, and preferably those that are priced lower than their intrinsic value.

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AAII developed several screens based on Grahams investing philosophy. Two of the screens, Graham Defensive Investor (Non-Utility) and Graham Enterprising Investor, were the top-performing value strategies in 2005, and both have respectable long-term records.

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April 2006 Issue

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Graham's Long-Term Winning Approach for Enterprising & Defensive Investors
Father knows best--at least as far as Benjamin Graham, the father of value investing, is concerned. A look at Graham's approach to long-term investing for both enterprising and defensive investors.

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by Cara Scatizzi

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April 2006 Issue