Er, what is value investing?

Where do you see this?

In financial books and websites.
 

What does it mean?

Value investing means buying a stock at less than its intrinsic value in the belief that its true worth will eventually be recognised

. A value investor is primarily attracted by stocks with low prices compared to their underlying book, replacement or liquidation values.

The discount of the market price to the intrinsic value is what legendary investor and author Benjamin Graham called the 'margin of safety'.

This method of investment has been encouraged by legendary investors such as Warren Buffett and Peter Lynch.

Why is it important?

Value investing focuses on firms that have been ignored by the markets.

Since value stocks sell at a discount, they generally experience less volatility and could potentially offer stronger future performance.

Still, just because a stock is cheap does not necessarily mean it has good value.

The risk is that a value stock may remain undervalued or overlooked by the market for a long time.

So you want to use the term. Just say...

'My resolution for the new year is to go into value investing.

Hopefully it'll make me rich in the long run.'