Apollo Investment Management – Value Investing Explained

It is generally considered as lower risk when compared to growth investing. Unlike growth investing, which is best suited for investors who are focusing on capital gains, value investing approach can be opted by investors whose main focus is either for capital gains or income, However, an income investor is more likely to choose a different value strategy as compared to one who is looking for capital gains.

How does it work?

Value investors basically buy a stock when its price seems significantly low compared to previous levels, most certainly the reason being that a company is going through reorganization or undergoing a management change, which sets off a slump in its share price.

In addition to paying attention to stocks that are currently mispriced, value investors also place their focus on companies that consistently pay dividends whilst being fundamentally profitable and are paying a segment of profits back to investors without fail. Having said that, dividends also invariably help value investors make the most out of steady returns alongside waiting for the stock to escalate in value.

Value investing as opposed to growth investing is less likely to interest investors who are interested in drastic results in the short term, although there are quite a number of value investors who have been very successful.
Investing Process

There are essentially two types of investing involved in the process – top down and bottom up. A top down strategy to investing starts with basically examining the economy as well as the market conditions to finalise which sector is more likely to be beneficiat. Following that, stocks can be picked from these sectors. On the other hand, when the bottom up approach is opted for, general market conditions are not taken into consideration. The focus is entirely stock selection on the basis of complete analysis of the company’s valuation, balance sheet etc.

Apollo Investment Management is an investment firm serving clients in the United Kingdom, providing transparent financial advice with integrity and a deep understanding of market realities.

Disclaimer:

• Please consult a registered investment advisor before making any investment 

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About Apollo Investment Management

We are a fully authorized and FCA regulated company proud to put our clients first and work with transparency and integrity. We tailor investment portfolios to suit the individual financial goals of our clients to help them make wise and safe investments with steady returns.