Steer Clear of Value Investing Myths

Some people define value investing as sifting through a haystack full of penny stocks, looking for that one winning needle. Others see it as accumulating stocks that trade at unusually low price-to-earnings ratios and waiting for nature to take its course.

In fact, folks, there are probably as many ways to play the value game as there are stars in the sky. But before you start value investing yourself, you should be sure you understand what you're getting into and avoid some commonplace myths.

For instance, some investors seem to assume that simply because a stock is out of favor now, it will probably bounce back soon. I can't count the number of times I've heard both retail and institutional investors say, "The stock has gotta come back sooner or later -- and when it does, I'll make money." ...