It is often said that value investing requires patience. Unlike most investment-related generalizations, this statement is actually 100% correct. While value investing is often viewed as more of a long-term venture than “growth” investing, the fact is that any investing requires patience and discipline. Not every position works out immediately. Moreover, because nobody can time the market, some of the best-researched ideas and strategies might require time — and patience — to begin paying off. #-ad_banner-#Over the past decade, however, value investors — ones who seek cheaper stocks selected on the basis of more attractive valuations — needed a bit… Read More
It is often said that value investing requires patience. Unlike most investment-related generalizations, this statement is actually 100% correct. While value investing is often viewed as more of a long-term venture than “growth” investing, the fact is that any investing requires patience and discipline. Not every position works out immediately. Moreover, because nobody can time the market, some of the best-researched ideas and strategies might require time — and patience — to begin paying off. #-ad_banner-#Over the past decade, however, value investors — ones who seek cheaper stocks selected on the basis of more attractive valuations — needed a bit more patience than usual. That’s because value investors have been waiting, largely in vain, for their investment style to outperform the market. The chart below illustrates this conundrum: over the last 10 years, the value index, represented on the chart below by the iShares S&P 500 Value exchange-traded fund (NYSE: IVE), has returned significantly less than its faster-growing counterpart, iShares S&P 500 Growth ETF (NYSE: IVW): 57% vs 143%, respectively. (The S&P 500 Value and the S&P 500 Growth indices don’t overlap and, combined, they comprise the better-known S&P 500.) Wait a minute, you might say, this is… Read More