Value investing is an investment strategy in which you buy stocks that are temporarily trading below their intrinsic value. So, shares of a good company at a low price. This allows you to benefit more strongly from value appreciation in the long term.
With value investing, you therefore have 100% control over what you pay. As a result, you stay the course even when the market is turbulent. This provides peace of mind while your wealth generates consistent returns.
Value investing gained worldwide recognition thanks to icons like Warren Buffett.
What is the power of value investing?
Low price, high quality
Value beleggers gaan juist tegen de stroom in: zij kopen als anderen verkopen. Wanneer markten overspannen reageren en koersen dalen, ontstaan er kansen om solide bedrijven tegen een lagere prijs te kopen.
The built-in buffer
Door te kopen onder de werkelijke waarde van een bedrijf, creëer je een financiële buffer, ofwel een margin of safety. Die beschermt je vermogen tegen onverwachte tegenvallers of marktschommelingen.
The power of patience
Het kan even duren voordat de markt de waarde van een aandeel erkent. Maar wie geduldig is, wordt vaak beloond met bovengemiddelde rendementen.
Value investing is a marathon, not a sprint
Two types of value investing
There are generally two ways to apply the value strategy:
Pure Value Investing: the focus is on the relationship between price and intrinsic value, often separate from a company's fundamentals.
Quality Value Investing: the focus is on the price-quality ratio. A company must be undervalued, but quality is paramount.
Who is value investing for?
The value strategy is ideal for investors who are looking for peace of mind, stability, and long-term returns. It is less suitable for those who want to trade quickly or pursue short-term gains.
Everyone is a value investor in everyday life. You always want good quality for a low price, right? Yet many people abandon common sense as soon as they start investing. The value approach brings that logic back: don’t buy because everyone else is doing it, but because it truly offers value.
The value strategy has delivered solid results over the past 100 years. Historically, value stocks have on average performed better than popular growth stocks, whose future earnings are often already priced in.
How value investments have performed better than growth investments over the past 100 years.
Source: Fama/French and Amundi US. Latest data point as of September 30, 2024.
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