Value Investing – “An Investors Friend or Foe In The Course Of A Pandemic”

Abstract

The study has attempted to judge the performance of value stocks in the bear market caused by the COVID-19 pandemic. The study has outlined two objectives namely to evaluate the performance of value stocks during the market crash and weigh the differences between value and growth strategies by analysing the value-growth valuation dispersion. The study is limited to Indian stock markets. The data was cumulated from secondary sources, namely websites like National Stock Exchange, Bombay Stock Exchange, Yahoo finance, MSN money and News articles. Further, Risk & return analysis was done on the data. The Study suggested that, value strategy tends to perform poorly when shock to the fundamentals sets up a bear market as was the case in the market downturn due to the pandemic and the value-growth valuation dispersion remained at the highest levels. “History doesn’t repeat itself, but it often rhymes”- Mark Twain. What value investors can learn from this bear market is that investing in both value and growth categories can be fruitful for the overall portfolio with a potential for high returns with low volatility.