Is value investing right for you?
If your main investment goal is to keep your risk of loss to an absolute minimum while increasing your chances of making a profit, you are probably a value investor.
In contrast, those who prefer to follow the hottest companies in the market often find value investing downright boring, as growth opportunities for value companies tend to be low at best.
Value investors also need to be sustainable. The value determination process excludes many more stocks than it reveals, and this can be a very unpleasant way to invest during a bull market.
Many stocks that you cross off your shopping list during your search will continue to rise in price in bull markets, despite the fact that you considered them too expensive from the very beginning.
But the payoff comes when the bull market ends, as the safety margin from stocks can make it much easier to ride out a downturn.