Why UK Value Stocks Are Still the Trade of the Decade
Merryn Talks Money
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The Importance of Inflation in Investing
Mainstream stocks and bonds represent vulnerable markets in a period of rising inflation with a carve out. Inflation helps value partly because inflation pushes up that discount rate. Investors want the margin of safety associated with having a good base of profits, book value or sales. For every hundred pounds they invest, they want a decent base of profits,. sales, etc. And that's value. The value side gives you that, the gross side, you're paying for hopes and dreams, which are nice.
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