Growth or Value Investing: Which is Better? Part IV

In our last blog post, we discussed what's value investing.  Now we will look at the pros and cons of value investing.

Pros of Value Investing

• Find devalued assets when others are panicking.
  
• Avoid the hype and herd mentality.
  
• Day-to-day price fluctuations and market volatility are not much of a concern to value investors because they are focused on the value of a business instead of external factors.
  

Cons of Value Investing

• It can be difficult to determine if a stock has bottomed out or could continue falling further down.
• The value company’s price could underperform for many years or may never rise.
• May lose out on larger gains due to searching for companies with a margin of safety.
  
• Poor liquidity due to the stock’s underperformance or low market cap.
  
• Extensive fundamental research required.