The volatility-laden months for U.S. equities near the end of 2018 was a reminder that investors can take advantage of value as a means of defensive positioning with their portfolios. However, the same due diligence regarding volatility is necessary in Asia, which is where value, again, plays a major role.
“As volatility picks up globally, buying stocks at a substantial discount to their intrinsic value can help mitigate volatility,” Zhou noted. “You get a double advantage, first when the initial discount to the fair value narrows and, second, as the fair value grows and compounds over time.”
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