Value funds- A subcategory of equity mutual funds
Value funds invest in undervalued companies’ stocks, according to the fund manager.
Some stocks are deemed overvalued in the stock market if their price is too high in comparison to the underlying sector or company.
On the other hand, if the stock price is too low with respect to the underlying business, certain stocks are deemed undervalued.
Stocks that are reasonably priced are considered stocks that are fairly valued.
The description of what is overvalued, undervalued, and fairly valued is not evident. It varies from investor to investor.
Even if a stock price is too high or too low, most investors will assume that a stock is overvalued or undervalued.
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