Pros
Reduces long-term risk of losing money by choosing investments which have a built in margin of safety
“Hot” stock tips, hype, and mass hysteria do not affect the decisions a value investor makes
Can produce steady, consistent gains that regularly outperform most benchmarks (e.g. S&P 500, DJIA, etc..
Cons
Value investing is extremely taxing to the average person, as significant analysis must be done prior to investing, and it requires an unusual level of confidence, as investments are made with an infinite time-horizon.
Value Investors must be willing to remain within their circle of competence and invest only in businesses they fully understand. As you can probably see, value investing places great significance on being a savvy businessperson in addition to having an in-depth understanding of securities and markets.
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