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Value Fund
Value funds is a mutual fund that seeks to invest in undervalued and stocks that are temporarily out of favor with the market.
Value fund investing is based on premise of market inefficiency, which sometimes leads companies to trade stocks at price below what they are worth. Led by assumption that stock will not stay undervalued indefinitely, value funds will invest in these companies and experience profits when market annuls its inefficiency. One of indicator of undervalued companies is a low P/E ratio, but it should be analyzed in correlation with other fundamental and technical factors.
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