Stock Investing Strategies
1. Value Investing
Value investing involves buying stocks at a discount to their intrinsic value. Value investors estimate the discounted value of all distributions and attempts to purchase a stock below that value, providing a margin of safety to the investment. The price you pay for an asset will have a profound effect on your returns.
Value investing employs the most important concept of investing: valuation matters! You can buy the the best company in the world but if you pay too much, the probability of achieving your goals is greatly reduced. On the other hand you can buy a poor company, but if you buy it cheap enough, the probability of achieving your expected rate of return is greatly increased.
2. Contrarian Investing
Contrarian investing, like value investing, attempts to buy stocks that are undervalued. However, a contrarian investor attempts to exploit studies in behavioral…
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