We have recently asked our investment community how did their investment strategy change in 2022 and if the recent drop in the stock market had any affect on their long term investment goals. It seems that value investing is still the core strategy for long term investors.

Value investing is an investment strategy that involves picking up stocks in companies that investors believe are, for certain reasons, undervalued. A lot of investors put an equal sign between value investing and defensive investing, mainly because investing in value companies is seen as a conservative strategy, exposing investors mainly to companies that have a conservative valuation (a P/E ratio of less than 15), pay dividends and have a strong position in the market. But is value investing still popular after years in which the spotlight was on growth companies?

In order to find the answer, we have asked our investing community to participate in a short survey.  Based on the pool we have conducted on our LinkedIn Page, 43% of the respondents indicated that value investing is still the core strategy they follow, assuming a DCA allocation (monthly or quarterly).

The popularity of value investing lays in its long term investing approach and in some of its renowned supporters like Benjamin Graham and  Warren Buffet. Basically, a value investor will always look for undervalued stocks that sell below their intrinsic value and offer a good margin of safety. The margin of safety is a key concept for a value investor as when the market goes down, the difference between the intrinsic value and the value paid for one share of the company gives the investor a safety net that, eventually, will minimize losses.  Basically, someone could call the value investing strategy a sleep well strategy, a strategy that gives investors some calm and reassurance when things in the market don’t go as expected.

Value investing is followed by growth investing and ETF investing as the second most popular investing strategy with 29% preferences among our respondents.  Growth investors are looking to invest in companies that offer a wide upside potential, greater than the overall return of the market. Small cap companies or newly listed companies tend to be preferred by growth investors. On top of that, a growth investor doesn’t pay to much attention to dividends and is mainly interested in capital appreciation.

We were pleased to see that investing in ETFs is popular in our community. Investing in ETFs is one of the easiest and most recommended investment strategy, especially for beginners. As part of our Carpathia Basic Investment Roadmap, we recommend passive investors to most of the investors that started to invest recently and are still in the process of shaping their investment strategy and financial goals.

What about investing in bonds? Is this part of your investment or diversification strategy? With the recent spike in yields, bonds start to look tempting for investors seeking for stability and protecting their principal. But how far away will you be from the rebound in stocks if you invest in bonds?

ENDS

For further information on this topic, please contact:
Carpathia Investing Club
invest@carpathiainvestingclub.org
www.carpathiainevstingclub.org | Cluj-Napoca, Romania, 400680

Please do not consider this article as investing, financial, legal or tax advice. The articles on the website present information of general nature. The content of the website is for educational and informational purpose only. 

About Carpathia Investing Club

Carpathia Investing Club (CIC) was founded in 2021. The club is dedicated to support individuals all around the world to better understand and apply investing principles. For first time retail investors, the club’s activity is based on a combined educational and practical approach that emphasizes the need of a proper understanding of the basic principles that govern the stock market before starting to invest. For more experienced retail investors and institutional investors, the club works as a forum that offers the opportunity to discuss and analyze various investment opportunities private and public companies.