The articles were written at different times and do not necessarily reflect current law. We disclaim any responsibility to update you as to the changes in these laws or make changes to these articles. Information in this section does not constitute legal, tax or investment advice. You should consult your legal, tax and financial advisors before making any financial decisions. These styles reflect fundamentally different points of view and valuation methodologies.
Value investors focus on the worth of a company's assets in assessing investment opportunities.
The theory behind value investing is that the company's undervalued assets are capable of generating higher returns and, when they do, its stock price will rise accordingly. The value investor feels that high stock prices are inherently dangerous, because any mistake in judgment can be quite costly. Value investors tend to place a premium on avoiding losses. The risk with value investing is that one can end up buying yesterday's ideas. Even if a stock is cheap, it is still possible to lose money on the investment if the underlying business fails because the company would not or could not adapt to change.