Table of Contents

How does value investing work?

5 value investing principles

Growth vs. value investing

Choosing a value stock

The bottom line

LearnValue InvestingWhat Is Value Investing? A Beginner’s Guide

What Is Value Investing? A Beginner’s Guide

Jun 21, 2022


5 min read

Value investing is a strategy based on buying undervalued investments and holding on to them for an extended period of time. Learn about the principles of value investing.

A value investing strategy is based on buying undervalued investments and holding on to them for an extended period of time. Generally, value investors focus on strong companies with a long history of solid returns, and aim to purchase those stocks when they appear to be underpriced.

Though value investing takes time and patience, it’s a popular strategy among many well-known investors. Warren Buffett, for instance, considers himself to be a value investor. “Never count on making a good sale,” Buffett has stated. “Have the purchase price be so attractive that even a mediocre sale gives good results.”

That sentiment is shared by many value investors, who intend for their stocks to trend positively over the long-term, rather than trying to time the market or pick a growth stock that may (or may not) experience meteoric short-term growth.

How does value investing work?

In theory, value investors buy stocks with a significant delta between the current price and the stock’s intrinsic value. Over time, and as other investors notice this delta and purchase the stock, the price corrects. In turn, the investors’ portfolios gain value.

Value investing is a slower process, though. If investors can’t hold out long enough for that investment to correct—or that expected correction never comes at all—they may still find themselves losing money. All stocks are unpredictable, and there are no guarantees when it comes to investing.

5 value investing principles

There are five general principles of value investing:

  1. The price is right.

    When it comes to choosing value investments, investors are looking for stocks that are underpriced compared to the company’s intrinsic value, and are likely to gain value over time.

  2. The companies are established.

    Seasoned value investors look for reliable companies with a history of steady growth, a solid financial structure, and a strong management team. Although none of that guarantees future growth, companies that have shown progress for years (or even decades) may be more likely to continue on an upward trajectory.

  3. Dividends are (usually) offered.

    Value investing typically involves seeking out companies that consistently pay dividends, as dividends are generally associated with more mature and established companies. (Newer companies tend to reinvest in their business.) By paying dividends to investors, these companies indicate that they are moving out of the initial growth phase and feel financially stable.

  4. Growth is slow but steady.

    By definition, value investing stocks are most likely to provide consistent growth in the years to come, but they generally won’t involve explosive growth. Value investing instead focuses on buying stable investments at a good price, then holding onto them as they steadily (albeit, slowly) grow.

  5. Diversification still matters.

    Regardless of the investments purchased, value investors still recognize the importance of portfolio diversification as a way to amplify growth and hedge against loss.

At Titan, we are value investors: we aim to manage our portfolios with a steady focus on fundamentals and an eye on massive long-term growth potential. Investing with Titan is easy, transparent, and effective.

Get Started

Growth vs. value investing

The value investment strategy is different from a growth investing approach.

With growth investing, investors try to find and purchase stocks that they expect to have explosive short-term growth. (Think stocks like Amazon or Tesla, which have seen unprecedented success in recent decades.) These are generally newer companies; although their assets and financial history don’t necessarily support their stock price, and may even seem overvalued, these investors believe the potential for growth warrants the risk.

Here are the key points of difference between value and growth investing.

  • Typical stock price.

    Value investing focuses on stocks that are perceived to be reasonably or under priced, whereas growth investing focuses on stocks that may appear overpriced.

  • Expected growth timeline.

    Value investing takes a long term view, whereas growth investing takes a short term view.

  • Dividends.

    Value investing usually involves stocks that pay dividends, whereas dividends are uncommon in growth investing.

  • Typical company age.

    Value investing focuses on older, established companies, whereas growth investing focuses on newer companies.

Some investors will choose value investing vs. growth investing (or vice versa) if it better aligns with their risk tolerance. Other investors may choose to balance their portfolio with a blend of value and growth stocks.

Choosing a value stock

To sift through potential value stocks, investors will typically do extensive fundamental research, including the following:

  • Examine the company’s history.

    Investors want to know: Does the company’s past indicate strong leadership, values, and a history of innovation?

  • Consider the company’s assets and financial stability.

    Investors often analyze the company’s solvency, financial management, and asset stability.

  • Scrutinize the company’s future plans and projections.

    Does the company hold patents or specialized technology that competitors don’t? Do they lead the industry in innovation or have other advantages?

  • Determine whether dividends are offered.

    Dividends are not required for a stock to be a value investment. They are frequently offered by mature, financially stable companies, however, which may signal value potential to investors.

  • Analyze the industry.

    Certain industries are cyclical by nature. Although the stock prices may rise initially, that growth may be lost further into the cycle.

The bottom line

Value investments are a common choice when it comes to promoting stable, long-term portfolio growth and potentially earning dividends along the way. They require patience and time, but remain popular among some of history’s most successful investors.


Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, Titan has not independently verified such information and makes no representations about the accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; Titan has not reviewed such advertisements and does not endorse any advertising content contained therein.

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any strategy managed by Titan. Any investments referred to, or described are not representative of all investments in strategies managed by Titan, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results.

Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see Titan’s Legal Page for additional important information.

Three Things, a newsletter from Titan

Stay informed on the most impactful business and financial news with analysis from our team.

You might also like

What Are Growth Stocks?

Growth stocks are one option for investors looking to buy into companies where the future is more important than the present. Learn more about what growth stocks are.

Read More

Cash Management

Smart Cash

Smart Cash FAQs

Cash Options


© Copyright 2024 Titan Global Capital Management USA LLC. All Rights Reserved.

Titan Global Capital Management USA LLC ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept and agree to Titan’s Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities or investment products. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings and other information provided are for illustrative purposes only and are not to be considered investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.

Please refer to Titan's Program Brochure for important additional information. Certain investments are not suitable for all investors. Before investing, you should consider your investment objectives and any fees charged by Titan. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested, including principal. Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members of FINRA/SIPC. For more information, visit our disclosures page. You may check the background of these firms by visiting FINRA's BrokerCheck.

Various Registered Investment Company products (“Third Party Funds”) offered by third party fund families and investment companies are made available on the platform. Some of these Third Party Funds are offered through Titan Global Technologies LLC. Other Third Party Funds are offered to advisory clients by Titan. Before investing in such Third Party Funds you should consult the specific supplemental information available for each product. Please refer to Titan's Program Brochure for important additional information. Certain Third Party Funds that are available on Titan’s platform are interval funds. Investments in interval funds are highly speculative and subject to a lack of liquidity that is generally available in other types of investments. Actual investment return and principal value is likely to fluctuate and may depreciate in value when redeemed. Liquidity and distributions are not guaranteed, and are subject to availability at the discretion of the Third Party Fund.

The cash sweep program is made available in coordination with Apex Clearing Corporation through Titan Global Technologies LLC. Please visit for applicable terms and conditions and important disclosures.

Cryptocurrency advisory services are provided by Titan.

Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice.

Contact Titan at 508 LaGuardia Place NY, NY 10012.