One of the simplest—yet the most ignored —investment concepts is value investing. It is something that has inherently been woven into our psyche as consumers, but continues to elude our understanding as investors. Value investing has a simple logic: buy things cheap. This means that stocks should be bought at a price that is less than their actual worth. If you feel that a stock’s current price is less than what it could be at a future date, then buy it now. Value investing is as easy as that.
However, unfortunately, value investing hasn’t gained much ground in India. The concept has failed to catch up largely because Indian markets are growth and momentum driven. When investors are busy chasing returns, it is hard to be patient and look at stocks that are undervalued. There have been a few funds that have made noises about value investing, but none are dedicated to it. Although that is about to change later this month, Fidelity Investments is launching India’s first value investing fund. It will be interesting to see how the concept is adapted by the AMC and how it is accepted by the Indian investors.