Value investing seeks stocks trading below intrinsic value. Blue-chips offer stability with potential upside.
Key Metrics
| Metric | Good Value |
|---|---|
| P/E Ratio | < 15 |
| P/B Ratio | < 1.5 |
| Dividend Yield | > 3% |
Hypothetical Examples
Example 1: Traditional Bank - Trading at 10x earnings vs. historical 14x.
Example 2: Consumer Staples - Strong moat, 4% yield.
Risks
- Value traps: Cheap for a reason.
- Market timing.
- Economic downturns.
Takeaway: Patience and discipline key in value investing.