For many new investors, creating a strategy is the most challenging step in starting your investment journey.
Well, I have a solution for you, value investing.
This strategy won’t make you rich fast, but it will make you rich slow.
Now, I may lose a few readers at this point, but, for those of you that are still here, my understanding is that lifelong wealth is a marathon and not a sprint.
Value investing is the strategy that Warren Buffett uses and is based on the idea that you should buy and hold your stocks for the majority of your life. This concept is very similar to the buy and hold method, but has a small difference.
Value investors look for companies with share prices that they believe are undervalued compared to their long-term outlook.
This means you want to look for shares in companies that you believe will grow in the next 5, 10, or 15 years. Another thing value investors look for are the dividend payouts. Most look for a payout yield of about 2-6% annually because it shows the company is still investing in improving, but, paying out a decent portion of their profits to investors.
By consistently buying shares of companies you believe in, you should see the long-term growth of your money.
A few popular value stocks are:
- Nike (Symbol: NKE)
- AT&T (Symbol: T)
- McDonalds (Symbol: MCD)
- Ford (Symbol: F)
Remember, very few rich people became rich fast; they got rich by consistently growing.