|Five Year Return:||18.5%||12.1%|
|Ten Year Return:||10.8%||5.8%|
With the long-running bull market a distant memory, many once comfortable investors are suddenly wary; some are even beginning to panic. Others are beginning to look for new portfolio models and investment strategies that will secure their futures.
These investors might want to look at one of the investment game's old veterans for comfort and safety-value investing.
Value investing is the old stand-by. It is an investing approach that is strictly adhered to by many investors. Perhaps considered old-school by some, it is an ideology periodically reviewed in market environments such as now. Studies show that value strategies often fare better than growth strategies during bear markets and may even outperform growth strategies in the long run when risk is considered.
Value investing concentrates on unappreciated stocks trading at attractive prices-bargain stocks. Value investors search for stocks that are attractively priced relative to some measure of intrinsic worth. They most often look for solid companies whose stocks are trading at low multiples of price relative to book value, cash flow, earnings, dividends, or sales. This contrarian way of thinking looks for such stocks with the hopes that these low multiples are temporary, that the company will withstand Wall Street's wrath, and prices will eventually rise as Wall Street realizes the true worth of the firm.
…To read more, please become an AAII member or login.