Apply the value investing belief to your stock market investment

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Apply the value investing belief to your stock market investment

Posted On : Aug-09-2011 | seen (229) times | Article Word Count : 412 |

Value investing can be also understood by example of long term investment in unrecognized stocks. Basic aim while Value investing shouldn’t be only in analyzing profit.

Value investing is the term given to investment strategy that basically aims at investing in market stocks that are underpriced and to keep a hold onto them until they gain their assessed market potential. Various concepts and strategies have been developed to enhance the aspects of Value investing since it was formulated in earlier 1930s.

Investors buy stocks at a price lesser than its intrinsic value. The difference between the actual value and the intrinsic value is termed as “margin of safety”. This margin of safety is one of the central ideas of Value investing. It protects the investor’s interest in downturns and bad decisions. Common interpretation for this margin for high quality stocks can be about 90% of the intrinsic value whereas for the average stock it is around 50% of the intrinsic value. Value investing can be also understood by example of long term investment in unrecognized stocks. Basic aim while Value investing shouldn’t be only in analyzing profit. Always look for the business opportunity of that sector. Development will bring profit. For example all the IT industries gained huge attention after the internet boom. Investors need to look for that opportunity and that’s what value investment is all about.

Value investing has been a controversial term as people are always unable to understand the basic theme behind it. Some think of it as buying low prices stocks and some as capturing the market with large investments. But basically a good investor should understand the efficiency of market. People should understand the fact that when someone sells something another person is buying it. In any case there is always one fool that is allowing the other to make profit. If we understand this process we can very well set the goals of the stocks and that makes a good investor. Then the investor should focus on better search strategy and as said earlier the opportunity in that business opportunity. The biggest reason of that is, the investor is doing nothing which is making profit. It is the fact that an investor lends his money to company to do their job and if that job is really productive it will make profit for him.

In layman’s terms Value investment can be defined as a well researched investment technique that focuses on good investment and better earnings. Obviously it’s hard to learn what makes a good value investor.

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<h1>Apply the value investing belief to your stock market investment</h1> Author: <a href='http://www.articleseen.com/profile_Niveza Investor Exchange.aspx'>Niveza Investor Exchange</a> Value investing is the term given to investment strategy that basically aims at investing in market stocks that are underpriced and to keep a hold onto them until they gain their assessed market potential. Various concepts and strategies have been developed to enhance the aspects of Value investing since it was formulated in earlier 1930s.

Investors buy stocks at a price lesser than its intrinsic value. The difference between the actual value and the intrinsic value is termed as “margin of safety”. This margin of safety is one of the central ideas of Value investing.  It protects the investor’s interest in downturns and bad decisions. Common interpretation for this margin for high quality stocks can be about 90% of the intrinsic value whereas for the average stock it is around 50% of the intrinsic value. Value investing can be also understood by example of long term investment in unrecognized stocks. Basic aim while Value investing shouldn’t be only in analyzing profit. Always look for the business opportunity of that sector. Development will bring profit. For example all the IT industries gained huge attention after the internet boom. Investors need to look for that opportunity and that’s what value investment is all about.

Value investing has been a controversial term as people are always unable to understand the basic theme behind it. Some think of it as buying low prices stocks and some as capturing the market with large investments. But basically a good investor should understand the efficiency of market. People should understand the fact that when someone sells something another person is buying it. In any case there is always one fool that is allowing the other to make profit. If we understand this process we can very well set the goals of the stocks and that makes a good investor. Then the investor should focus on better search strategy and as said earlier the opportunity in that business opportunity. The biggest reason of that is, the investor is doing nothing which is making profit. It is the fact that an investor lends his money to company to do their job and if that job is really productive it will make profit for him.
 
 In layman’s terms Value investment can be defined as a well researched investment technique that focuses on good investment and better earnings. Obviously it’s hard to learn what makes a good value investor.

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About the Author: <a rel="nofollow" href=http://www.niveza.in/home.jsp>Niveza</a> was founded by a group of entrepreneurs who believe that Wall Street and fund managers don't have monopoly on investment talent. We are on a mission to uncover world's greatest proven investors and allow any individual to benefit from the knowledge and decision making of these great investors for a reasonable fee. Article Source: <a href='http://www.articleseen.com/Article_Apply-the-value-investing-belief-to-your-stock-market-investment_72431.aspx'> http://www.articleseen.com/Article_Apply the value investing belief to your stock market investment_72431.aspx</a>

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Niveza was founded by a group of entrepreneurs who believe that Wall Street and fund managers don't have monopoly on investment talent. We are on a mission to uncover world's greatest proven investors and allow any individual to benefit from the knowledge and decision making of these great investors for a reasonable fee.

Keywords : Stock market tips, stock picks, value investing, guru investors, expert stock investors,

Category : Business : Business

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