How Does Value Investing Work?

What makes the value investing style different from growth, and how can it benefit your portfolio?

Sunniva Kolostyak 24 August, 2021 | 10:26AM
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Whether to invest with a value or a growth focus is always a big discussion between investors. But what is it, how do the two methods differ from each other, and is the strategy right for you?

Let’s start with the basics – what is value investing? Put simply, it means buying stocks that are perhaps overlooked and unloved, trading below their intrinsic value, with the anticipation that markets will realise this and the price will go up. This strategy is believed by many to be less volatile than growth, as well as outperforming over the longer term.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Sunniva Kolostyak  is data journalist for Morningstar.co.uk