A Better Value Investing Strategy for 2014

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Value investing can frustrate even the most patient of stock pickers, Fool contributor Tim Beyers says in the following video.

Why? Cheap stocks tend to be unpopular in both cold and hot markets like the one we're in now. Investors can spend years waiting for Mr. Market to pay a fair price for their underappreciated holdings.

Look at ExxonMobil . Warren Buffett's Berkshire Hathaway recently acquired more than 40 million shares of the integrated energy giant; but, at 12.7 times earnings, the stock still trades for a sharp discount to both the wider industry and the S&P 500. ExxonMobil and peer Chevron have also badly underperformed the index this year. Say what you will about the quality of ExxonMobil's business -- it's still a laggard heading into 2014.

There's no surefire strategy for avoiding such short-term losers. Your best approach, Tim says, is to buy Dividend Aristocrats. Stocks with a track record of consistently hiking dividend payments tend to outperform over the long term. Reinvesting the proceeds (a free service with most brokerages) can protect against poor performers while geometrically improving your long-term returns.

Now it's your turn to weigh in. What is your value investing strategy for 2014? What cheap stocks do you like most right now? Please watch the video to get Tim's full take, and then leave a comment to let us know where you stand.

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The article A Better Value Investing Strategy for 2014 originally appeared on Fool.com.

Fool contributor Tim Beyers is a member of the  Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Berkshire Hathaway at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends Berkshire Hathaway and Chevron. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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