Value investing has been around for decades. It’s the idea of buying stocks that seem underpriced based on fundamentals. Investors look for solid companies trading below their real worth. But this year, a question keeps coming up—is value investing dead?
The market has shifted fast. Growth stocks, tech rallies, and quick trades have taken the spotlight. At the same time, some traditional value stocks have struggled. That’s led many to doubt if value investing still works.
Let's examine how value investing has held up this year, the key trends, and what the future might hold.
A Quick History of Value Investing
If you're not familiar with value investing, this should bring you up to speed:
- Value investing began in the 1930s with Benjamin Graham and David Dodd, focusing on buying stocks that trade below their intrinsic value.
- Warren Buffett made the strategy famous by applying it with long-term success, combining value principles with business quality.
- Over the decades, value has had stretches of strong performance, especially after market downturns when undervalued stocks bounce back.
- Value investing historical performance was strong in the early 2000s, after the dot-com bubble, when growth stocks crashed and value led for several years.
- The 2010s were tougher for value. Growth stocks, especially in tech, dominated due to innovation and investor optimism.
- Despite this, value has shown it still works. Early in 2025, value stocks led the market, particularly in financial and energy sectors.
- Long-term trends show that value and growth often rotate. Investors who stick with value through quiet periods often benefit when the cycle turns.
What’s Happening Now: Value Investing in 2025
This year, value investing stocks have had mixed results:
- Some sectors like energy and financials saw gains, but others lagged
- Tech and AI-driven growth stocks kept leading headlines and returns
- Rising interest rates and inflation worries hurt some value picks. Higher borrowing costs and uncertain macro conditions have made it harder for some companies to grow, even if their stock looks cheap.
- Many traditional value metrics didn’t predict strong performers
- Active value managers struggled to beat index funds
- Investors are rethinking how they define "value" in a changing market
- Short-term performance has raised doubts about long-term strategies
Is Systemic Value Investing Dead?
The short answer is: no. Systemic value investing isn’t dead, but here's the context around the answer.
Systematic value investing in wealth management uses models or algorithms to pick undervalued stocks. It removes emotion and relies on data. These systems follow rules, often based on metrics like price-to-earnings or book value. The idea is to stay disciplined, no matter what the market is doing.
But this year, the approach has faced challenges. Many of the signals that once worked are now less reliable. Cheap stocks don’t always bounce back. Some stay cheap for a reason—poor outlook, weak growth, or shifts in the industry.
Automation also struggles when market conditions shift fast. Human investors can adapt quickly, but models follow set rules. When those rules fall behind, performance drops.
Still, systematic value investing strategies aren’t useless. They work best with updated data and flexible filters. Investors are now adjusting models to reflect modern trends. So no, systematic value investing isn’t dead, but it’s clear it needs to evolve to stay useful.
The Rise of Day Trading vs Value Investing
Day trading has exploded in popularity. Social media, trading apps, and real-time news make it easy to jump in and out of stocks. Many new investors prefer quick trades and fast results over waiting years for gains. Unfortunately, some bad actors frame it as a get rich quick scheme to less experienced investors.
But day trading isn’t bad. It’s a big contrast to value investing, which takes a slow and steady approach. Value investors focus on the long-term picture. Day traders focus on the next hour.
This shift is changing the market. Price swings now happen faster. Trends rise and fall within days. That makes it harder for value strategies to keep up in the short term.
Still, both approaches have their place. Day trading vs value investing isn't about which is better—it’s about what fits the investor. Those with time, patience, and a long view often prefer value. Those looking for fast action lean toward day trading.
The rise of day trading has made markets more volatile. But it hasn’t made value investing useless. It just means long-term investors need to be more selective and more patient than ever.
6 Value Investing Challenges
Value investing isn’t dead, but it faces hurdles. The strategy still works, but several value investing challenges make it harder to apply successfully:
- Undervalued stocks can stay cheap for a long time. This delay tests investor patience and creates uncertainty around when, or if, a stock will recover.
- Traditional valuation metrics don’t always reflect true business value. Measures like price-to-earnings and book value miss key assets in tech or service-driven companies.
- Markets move faster than ever. Rapid trading, real-time news, and algorithmic systems leave little room for slow, steady strategies.
- Competition has increased across the board. With easy access to financial data and screeners, most undervalued opportunities are spotted quickly by other investors.
- Modern companies rely more on intangible assets. Things like brand strength, user data, and innovation often don't show up clearly in financial statements.
- Short-term profits are more tempting than long-term value. Many investors prefer fast returns, which makes it harder for value strategies to gain attention or capital.
Who Should Consider Value Investing
Value investing suits people who think long term and don’t mind waiting for results. It’s a better fit for those who prefer steady growth over fast gains. If you care about fundamentals (e.g., like earnings, strong balance sheets, and real-world performance) this approach might work for you.
It also helps to have patience.
Value stocks can take time to rise. It's great for investors who want stability and are comfortable ignoring short-term noise. Value investing offers a way to build wealth gradually with less hype and more focus on real business strength.
Modernize Traditional Investing with the Right Team
Value investing isn’t dead, but it’s not what it used to be. The market has changed, and the strategy needs to keep up. Relying only on old-school metrics no longer works. Investors need to blend traditional ideas with a more modern view of what value really means.
That might include looking at newer industries, factoring in brand strength, or adjusting expectations on timing. Long-term thinking still matters. So does discipline. But success now also requires more flexibility and better tools.
For those willing to adapt, value investing can still be a solid approach. It just looks different than it did a decade ago. Work with a team that understands how to adapt to your unique situation and goals.
Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.
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