The Intelligent Investor by Benjamin Graham

The Intelligent Investor by Benjamin Graham is a definitive book on value investing. Benjamin Graham introduces valuable investing concepts and shares interesting insights that can enable even the most ordinary investors to become ‘intelligent investors’. Listen to the book summary on Money Konnect Podcast by Edelweiss Mutual Fund and learn some interesting investment strategies!

What does it take to become an intelligent investor?

• A disciplined approach to investing that is tied to a philosophy of in-depth and robust research - It is always best to understand the investments that you make and do some research before making investment decisions.
• An ability to ignore market noise and instead focus on long-term value of your investments – In the short-term, asset prices respond to a host of factors that can be misleading and incorrect. Over the long-term, asset prices generally reflect the true fundamental value of the investment.
• Pay attention to your own risk profile and also the risk profile of the investment – Make investment decisions that adhere to your risk profile. For example, if you are a defensive investor then you should avoid high exposure to high-risk investments.
• It is wise to invest in stocks with a good margin of safety - In stock investing, the margin of safety is the difference between a company’s intrinsic value and its purchase price. The idea is to purchase the stock at a price that is sufficiently lower than its actual or intrinsic value. The greater the margin of safety, the more leeway investors have for potential risks if things go bad - before they start losing money.
• Focus on creating a diversified portfolio that is spread across multiple asset classes – Through correct asset allocation and optimal portfolio diversification, you can reduce the overall risk of the portfolio while maximising returns.

The Intelligent Investor by Benjamin Graham is one of the best books on value investing. You can read the book summary here or listen to the Money Konnect Podcast on the Edelweiss Mutual Fund website, Spotify, Google Podcasts and Apple Podcast. We hope you enjoyed this podcast and will tune in to listen to more such podcasts on investing nuggets.