Needless to say, investor confidence plummets when volatile markets experience historic cyclical lows like the one witnessed over the last one year. The major domestic markets were not an exception.
The Dubai Financial Market (DFM) lost around 70 per cent of its value in the last one year and the Abu Dhabi Securities Exchange (ADX) lost half of its value in the same period. But such periods provide good bargains for long-term investors, particularly if they are looking for picking value stocks that have simply hit historic lows in the momentum frenzy without much loss in their fundamental values.
Value investing is all about actively looking for stocks of companies that the market has undervalued. The strategy involves investing in companies that are trading significantly below their historic averages and below the market. Thus, it involves hunting for bargains on stocks trading for less than their intrinsic or true values.
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