What are the reasons for value stocks to get attention during a share market grind?

  • November 10, 2020 04:22 PM AEDT
  • Team Kalkine

Value stocks are basically those stocks that tend to trade at a lower price relative to their fundamentals like dividends, earning,s and sales, thereby making them attractive to investors eyeing long-run returns.

Gold MTF non-AMP

Usually, experienced investors indulge in value investing, buying fundamentally robust stocks and trading at lower prices.

Therefore, determining the ‘real’ value of a stock is vital to be able to make that decision whether the stock is cheap right now or it is still overpriced? Now let's have a look at the Reasons for these value stocks to get attention during a Share Market Grind

Good prospects of profitability - History has it that undervalued shares have offered good profits when the stock market has recovered from lows.

* Long-term hold – While assets like gold and bitcoin may outperform value stocks in the short run, in the longer term, value stocks may provide better profits.

* Preparation for the remainder year – more than 10 months of 2020 have passed, and the stock market has shown strong signs of volatility. Investors, who have lost their money in the gone months, might want to invest in some inexpensive but valuable stocks so as to reserve some of their profits.

* Liquidity – with economies reopening, the world economy might experience an improvement. Therefore, investing in value stocks may provide cash in hand once the stock market flourishes.

 


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