Value Investing

Value investing is a strategy of buying stocks that appear cheap relative to their fundamentals (low P/E, low price-to-book, high dividend yield) on the theory that the market has temporarily mispriced them below their intrinsic worth. The approach was popularized by Benjamin Graham and later Warren Buffett.

Value stocks have gone through long stretches of underperforming growth stocks, particularly during periods when a small number of fast-growing technology companies dominated market returns, which has fueled a recurring debate over whether traditional value metrics still work as well in a more intangibles-driven economy.