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The Case for Value Investing

Who won the race, the tortoise or the hare?

The tortoise is a value investor, with his hard shell and nerves of steel. He beams a placid smile as he watches hot stocks rise and fall quickly and hopes to see undervalued stocks grow, slowly but surely.

With growth stocks, we believe you pre-pay for expectations. That’s why growth stocks have returned an annualized average of 9.4%, while over the same time period value stocks have returned an annualized average of 13.6%1.  

Our Prudent Speculator Newsletter Portfolio has averaged 17% over its 40-year history of value investing2. It helps to have support to keep you on the long-term path. Wouldn’t you rather be the tortoise? Start by downloading this report and see the historical case for value investing.

What you'll find in this report


Value stocks vs. other asset classes

Do you like a good deal? Then value investing should resonate. See the historical data show that what makes sense in theory (i.e. buying things that are on sale) has also worked in practice, as value stocks have won the long-term performance derby versus other types of asset classes.


Historical data on the effects of FED rate hikes

You may be concerned that the Federal Reserve (FED) will raise interest rates and cause the markets to tank. This fear alone is often enough for some investors to stay out of equities. While some media outlets like to perpetuate this fear, we believe the historical data does not support it. Let’s look at what has happened the previous instances that the FED has initiated a series of interest rate hikes.


Stocks:  Average gains vs. average losses

Nobody likes to see their stocks go down. But for those who managed to stay the course, the historical data shows you that there have been a lot of advancing markets as well. The average gains have been far greater than the average losses. Find out what we believe is the key to being successful.


What to look for besides Price-to-Earnings ratio

You’ve probably heard the media say a stock is expensive because the Price-to-Earnings ratio on the S&P 500 is around 223. Historical averages have been in the 15 to 16 range4 . Yes, by that measure, stocks are trading above the norm, but valuations cannot be evaluated in a vacuum. Download to learn why.


How dividend and non-dividend stocks compare

Dividend payers have generated a more favorable long-term return than non-dividend payers5. This trend has been true going back to the 1920s. And, dividend payers have generally been less volatile than non-dividend payers. Not quite the Holy Grail, but investors have long sought higher returns with lower risk!

John Buckingham - AFAM Capital Chief Investment Officer, Editor - The Prudent Speculator Newsletter

"We believe in the tortoise, not the hare. Yes, it can be gut-wrenching in volatile markets, but the data speaks for itself."

Download the report and see what history teaches about value stocks.

". . . for 15 years you've quietly beaten Buffett's record"

 - April 10, 2015

"It pays to have nerves of steel. That’s the most important lesson to emerge from the Prudent Speculator’s position as one of this country’s most successful investment newsletters of the past four decades."

- February 23, 2017††