“The most important thing is Value” says Howard Marks in The Most Important Thing. Seeking out value, in my opinion,
is the best way to generate better returns in the stock market. In my previous article (link to article), I have provided steps to find undervalued stocks.
Besides seeking out undervalued equity by looking at metrics
of stocks, there are other alternatives. For readers who know that value
investing is the best way to invest but might not have the time or interest to
research on individual stocks, a mutual fund run by a value investor might be
the next best option. In this article, I will
explore the option of investing in a mutual fund. For investors who might not be able to invest in US Mutual Funds, by knowing the money manager who run the funds, we can adopt the strategy of following the gurus by buying into stocks where they have the highest conviction. Of course, the purchase can only be done after sufficient research on your own.
What is a mutual
fund?
As defined on Investopedia, a mutual fund is an investment vehicle
that is made up of a pool of funds collected from many investors for the
purpose of investing in securities such as stocks, bonds and other assets.
Mutual funds are operated by money managers, who invest the fund's capital and
attempt to produce capital gains and income for the fund's investors. An
advantage of mutual fund is that it gives small investor access to diversified
portfolio of equities managed by famed value investors.
Below are stocks that are held by the top 5 money managers:
1. Oracle (ORCL)
2. BAC (Bank of America)
3. MBIA (MBI)
4. Research in Motion (BBRY)
5. Procter & Gamble (PG)
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