Every investor thinks whether the strategy that they used in the past will work in future also? Although no one can guarantee it, but if some strategies that make people excited about the glamour stocks, likely to work in the future. According to different researches, most people like to hold their portfolio and do not trade it often. In his book, written in 1977, Mr David Dreman explained a price to earning P/E strategy in detail.
Furthermore, Dodd and Graham discussed the same topic in their book before David. Considering all these points, readers may be wondering whether such old strategy would work in the future. There might have been some years when a price to earnings strategy or some other strategies may not work. In those years, investors are advised to remain invested, calm and have patience. Furthermore, if you want to examine the stocks’ type that are in extreme value portfolios, many people will find them unattractive. Most of the times, such value stocks are defined in studies have high financial leverage.
Even these studies do not fulfil to what Mr Graham proposes one should do to their investment. Overall, it is very important to know that Graham’s principles are still working in the modern era. Value investing investors are advised to keep following their strategy and make it more valuable by reading the disciples of Buffet and other great investors.
The higher the risk, the higher the return will be. Holding your stock for a longer time period, obviously, includes more risk, but it certainly pays you more than what you invested. According to Graham, a better portfolio of stocks shows a satisfactory overall return. Moreover, if this portfolio is measured through a fair number of years, it will be a safe investment.
Even the modern risk-based models are unable to explain the reason why value investment strategies are better than the others. Even more, a commonly used academic model known as SLB or Sharpe-Lintner and Black model describes the beta as one of the most appropriate risk measures.
There are other models that can help you to understand the concept of risk in a better way. But, how one can learn about these concepts?
There are a number of investment courses available in Singapore that you can take and start learning as a student. No matter if you are a beginner or an expert investor, you will surely learn a lot from these investment courses. They will not only teach you professionally, rather you will be able to learn real examples of the greatest investors of all time.
Most of these investment courses include case studies that help students to answer selected questions in a proper way. Moreover, you can play online investment games that are free of cost. In fact, you can install such games on your android or iPhones.
Apart from the games, you can download investment related lectures from the internet. Professional teachers all over the world share their investment lectures on YouTube and other websites. All in all, value investment strategy will obviously work in the future.