Indian stock market for the last one year or so. The mutual funds that have been following the value investing strategy have offered handsome returns in the last year. However, fund houses that had been following the growth strategy have suffered. If you swear by value investing principles, you may invest in value funds to take care of your long term needs.
If you are new to value investing, you should acquaint yourself with this style of investing and its merits and demerits. A value investor tries to choose stocks that are available at cheaper valuations. These investors employ various ratios and methodology to identify such stocks. Essentially, they look for stocks that are available at a discount to their real or intrinsic value. Simply put, it means the market hasn't discovered the true potential of these stocks and they are available at a discount.
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View Details» <div data-placement=«Mid Article Thumbnails» data-target_type=«mix» data-mode=«thumbnails-mid» style=«min-height:400px; margin-bottom:12px;» class=«wdt-taboola» id=«taboola-mid-article-thumbnails-115471101»>Value investors buy such stocks and wait for the market to discover these stocks. When the discovery happens, the stock prices will go up, and value investors make money. It may sound simple. But it is not very easy to execute. The market may take very long to discover these stocks and it may test your patience. The discovery may not happen at all. That is why value mutual funds are recommended to only sophisticated investors.
The last few years had not been kind to the value investing fans as a