What is Value Investing?
In my previous post I spoke about the importance of investing in assets and cutting down on liabilities. This post is a continuation as to the way you should approach investing in assets. In fact I am using this very method of value investing as an investor in a crypto-currency asset too (I would talk more about in a bit).
Value investing to sum it up in a nutshell is investing in an asset during the time the market has priced it lower than its actual worth (i.e. intrinsic value).
A value investor does not care too much about the market valuation of an asset when deciding whether to invest. Instead they care about the actual value and worth of the asset based on the business behind the investment and its future potential.
So what a value investor does is look at how the market has valued an asset before value investing. And if they see that the market has priced the asset less than its actual worth then it is a good investment. To determine the actual worth of an investment you need to look at the actual value of the business behind the investment, and its future potential for growth and success ahead of it. By doing that a value investor can decide what they think the fair value (i.e. the price it’s worth) of an asset is to be.
Once you have an idea what you believe the fair value of an asset is worth then any price the market has given the asset below your fair value worth is a very good time to buy.
And that is the concept of value investing.
It is important that a value investor does not invest in something that they do not actually believe in or they are not willing to hold long-term. Because when value investing it is for the most part based on you believing in the value of the company and its potential for growth ahead. And you must be willing of course to hold long-term, despite the low market valuation of the asset, until the market gives the asset its real worth (however long that takes).
Now let’s take a look at a particular crypto-currency that right now makes an amazingly lucrative value investing opportunity.
To Read the Full Post Click Here: http://adz4life.com/cryptocurrency-value-investing/