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Value Investing: The Best Investment Strategy

Investing might seem like an intimidating or daunting undertaking. But the sooner you get started investing, the better off you’ll be. And that’s especially true for value investing. Value investing is arguably one of the best investment strategies out there.

With value investing, no matter where you are in your investing journey (whether you’re a seasoned vet or a total beginner), you can secure your financial future.

2 Investment Strategies

Here are two key investment strategies to consider. And why you’ll want to choose value investing.

1. Value Investing

Value investing is exactly what it sounds like. Investing in assets that offer you value. Basically, value investors look to get the most bang for their buck. They’re often considered the bargain hunters of investors for this reason.

Value investors aim for stocks that trade at lower costs than they believe these stocks should be trading. This way, when the market picks up on their value, those stock prices will go up. And value investors will profit on every share that they’d purchased at a discount.

The only real downside to value investing is that it’s pretty subjective. In other words, you decide whether the market is right or wrong about the price of a stock. This means that you need to have an educated opinion. Becoming a good value investor, therefore, requires a lot of research in companies and the larger markets in which they operate.

2. Growth Investing

Growth investing refers to investing in assets that have the potential to increase in price. These kinds of assets are common in emerging industries, such as the tech and healthcare sectors. There are generally two types of growth investments:

  • Short-Term Investments: You hold onto these for less than a year because you believe a company will see massive gains followed by a plateau.
  • Long-Term Investments: You hold onto these for more than a year because you believe the company will steadily increase over a longer period of time.

For growth investing to work out, you need to have a comprehensive understanding of the stocks in which you want to invest. Plus how they compare to other stocks. You also need to understand the company’s historical performance and future potential.

Investing Strategy Charts

Other Investing Strategies

Other types of investing strategies include momentum investing and income investing. Momentum investing refers to seeking out data-driven patterns and discrepancies in a company’s finances and capitalizing on equities that are either over- or undervalued. Income investing refers to buying securities that provide steady sources of revenue already instead of ones that could theoretically increase in value. Income investing can be further broken down into dividend investing (when a company regularly pays investors a portion of its profits) and bond investing (loans you grant to institutions or governments in return for guaranteed interest and principal repayment).

Why You Should Consider Value Investing

Deciphering the best investment strategy for you is not necessarily an easy feat, of course. But understanding your risk tolerance, investment goals, and investment timeline can all help. Fortunately, Q.ai can help you figure that all out. Q.ai will pair you with top-performing, auto-adapting, AI-powered kits that do the work for you.

One of the portfolios is the Value Hunter, for example. This portfolio is tailored to value investors. Value investing is a great place to start (and continue) investing, whatever your experience. Value investing is a more conservative, “buy and hold” approach to investing. It allows you to make steady gains over a longer period of time.

Warren Buffet, for example, is a world-renowned value investor who was able to sell his stocks for much higher than he’d paid for them. That was all thanks to market-corrected undervaluation. Buffet is known for following the Benjamin Graham school of value investing, but he takes it to another level. While many value investors don’t support the efficient market hypothesis (EMH), which suggests that stocks do indeed trade at fair value, Buffet isn’t concerned with what the stock market does at all. Rather, he focuses on companies’ performances, debt and other factors that indicate how their assets are doing or, rather, will be doing. Value investors like Buffet focus less on capital gain and more on ownership of quality companies that promise earnings down the line.


Because this investing strategy is rather conservative, you don’t risk as much as you would with a more aggressive investment strategy. While your gains won’t necessarily be as big or as immediate, you are likely to see growth over time. Therefore, going with value investing means limited risk without limited potential for gains.


Disclosures

Q.ai offers advisory services through Quantalytics Investment Advisors, LLC ("QIA"), a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients of QIA . Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Comments by viewers or third-party rankings and recognitions are no guarantee of future investment outcomes and do not ensure that a client or prospective client will experience a higher level of performance or results. Adviser has reasonable belief that the content posted by a Third Party does not contain untrue statements of material fact or misleading information regarding its advisory services.

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