- Value investing is a type of investment strategy
that typically involves bargain hunting.
And it's been a successful strategy
for investors throughout the decades.
In this video, we are going to be talking
about value investing, what it is,
how to get started and whether or not it's right for you.
(upbeat music)
Hey guys, it's Justine with the College Investor,
investing and personal finance for millennials.
So today is all about value investing.
So what is value investing?
Value investing looks at companies
that are typically undervalued by the stock market.
So investors really look at these stocks
from companies that are undervalued, and they're hoping
that the return on those investments will actually increase
and be worth more than what the stock market is projecting.
The thing about value investing
is that it does require a lot of research and time.
So you are going to be jumping into the books,
the financials of that particular company,
and figuring out all of these different little details
to determine whether or not that company
is a good fit for value investing.
You're basically taking on the role
of like a stock financial analyst.
And instead you're looking at a particular company.
So you're wanting to look
at things like current finances, their long-term plans,
what are the company's guiding principles,
their management team, and then their financial structure
and whether or not they pay out dividends.
All of this boils down
to what they call fundamental analysis.
So really if you like analyzing companies,
if you like research,
this could be a really exciting strategy
for you to use in your investments.
And you are going to be looking
for steady gains over the long run.
This is not a get rich quick type of investing strategy
and this could actually be really beneficial
to you in the long run.
So if you want to get started with value investing,
looking at all of those factors that I mentioned
and also you have to ignore what the masses are doing
and practice a lot of patience.
So you're kind of going against the grain
of what's new and trending on the stock market,
and instead you are going to be looking
for these hidden gems
which could be beneficial because you could swoop up
some really amazing stocks at a bargain deal
and then let that ride over the long run.
The only thing about this strategy
is that it is super time-intensive.
So if you don't enjoy looking up these individual stocks
and then this may not be the right strategy for you.
So should you give value investing a try?
I say, if you're gung ho about investing the stock market,
you enjoy looking up investing news,
you enjoy scrolling through different stocks
and just seeing what's out there.
Yeah, totally give it a shot.
Just know that when you invest
in a single company in a single stock
you're not really diversifying your investment portfolio.
However, you could add value in investing
in as one part of your investment strategy
and then look at allocating the rest
of your investments and diversifying it.
Now, if allocation and diversification
if that all sounds like new terms,
we have a whole section on investing and how to get started
that you can peruse and go through using our free tools
and resources @thecollegeinvestor.com.