Understanding Investment Styles: Why Value Investing and ETFs Are Ideal for New Investors
Investing v.s. Trading: The Core Difference
What is Investing?

Investing is often compared to planting a tree—requiring patience, care, and steady nurturing to see the fruits of your labor. This metaphor holds true across all investment styles, including Growth Investing and Value Investing, two of the most prominent approaches. While Growth Investing focuses on companies poised for rapid expansion, Value Investing seeks out undervalued opportunities with strong fundamentals. In this article, we’ll explore examples of both strategies, including insights from Warren Buffett’s legendary career, to help you understand their differences and why Value Investing may be the superior choice for beginners.
What is Trading?
Trading involves buying and selling assets frequently—sometimes within minutes—to profit from price changes. Traders thrive on volatility, using charts and market trends to make quick decisions. While trading can generate fast returns, it’s riskier and requires constant attention. Imagine trying to catch falling knives; one wrong move can lead to significant losses

Key Differences:
- Time Horizon: Investors think in decades; traders think in days or hours.
- Risk: Trading has higher risk due to market timing and leverage.
- Effort: Investing is passive; trading demands active monitoring

Popular Investment Styles Explained
Passive Investing
Passive investors buy and hold diversified assets like index funds or ETFs to mirror market returns. This "set-and-forget" strategy minimizes fees and avoids the stress of picking individual stocks. For example, an S&P 500 ETF lets you own small pieces of 500 top U.S. companies with one purchase.
Growth Investing
Growth Investing is centered around identifying companies with high potential for future expansion. These businesses often operate in emerging industries or are developing innovative products that could disrupt the market. However, investing in growth stocks comes with significant risks due to their reliance on future performance rather than current profitability. Below are some notable examples of Growth Investing:
Amazon (AMZN) in the Early 2000s
In the early 2000s, Amazon was a rapidly growing e-commerce company that had yet to turn consistent profits. Investors who believed in its vision for transforming retail poured money into its stock despite high valuations. At the time, Amazon was trading at price-to-earnings (P/E) ratios far above traditional benchmarks, reflecting expectations of future growth. Those who held onto their shares saw massive returns as Amazon became one of the largest companies in the world.
Zoom Video Communications (ZM) During the Pandemic
The COVID-19 pandemic created a surge in demand for remote communication tools, making Zoom a standout growth stock. Investors flocked to Zoom during its meteoric rise in 2020, driven by expectations that remote work would become a permanent fixture in professional life. While Zoom’s stock price soared initially, it later faced challenges as competition increased and pandemic-driven demand waned—highlighting the risks inherent in growth investing.
Dividend Investing
Dividend stocks pay regular cash rewards to shareholders, often from stable companies like utilities or consumer brands. This strategy provides steady income, but dividends can be cut during economic downturns.
Value Investing
Value Investors seek stocks trading below their 'true worth', otherwise known as the 'Intrinsic Value' or IV for short, due to temporary issue. As the saying goes, 'Trouble is Opportunity'. For instance, a strong company might drop in price after a marital scandal by the CEO, creating a buying opportunity. Over time, the market usually corrects these mispricings, rewarding the patient investors.
“The stock market is a device for transferring money from the impatient to the patient”
~ Warren Buffett
Why Value Investing Works?
- Margin of Safety: Buying undervalued stocks reduces downside risk.
- Focus on Fundamentals: Value Investing prioritize strong financials (e.g. profits, debt levels) over hype.
- Historical Success: Legends like Warren Buffett built fortunes using this approach
Warren Buffett is widely regarded as the greatest value investor of all time. His career offers numerous examples of how patience, discipline, and a focus on fundamentals can lead to extraordinary success. Below are some key instances where Buffett applied his value investing principles:
American Express (1960s)
Why Value Investing Beats Other Strategies
1. Less Stress, More Consistency
Growth stocks and trading require predicting the future or timing the market—tasks even experts struggle with. Value investing relies on objective data (e.g., a company’s balance sheet) rather than guesswork.
Remember that we aren't fortune tellers, and even stock market analysts often get things wrong—sometimes quite significantly. While they use data, financial models, and expert insights to make predictions, the stock market is inherently unpredictable due to factors like economic shifts, investor sentiment, and unexpected news.
How wrong can the analysts be, you ask? It is well-documented that the financial analyst failed to predict the 2008 financial crisis. In fact, it's not that they missed it, but they positively denied that a crisis would happen, according to Franklin Allen, finance professor from the Wharton School of the University of Pennsylvania.
A notable example is the overreliance on complex financial models and derivatives, which led to a false sense of security among market participants. This complacency contributed to excessive leverage and risk-taking, culminating in the crisis.

2. Focus on Fundamentals
Value Investing prioritizes objective metrics like earnings, cashflow, and debt levels rather than speculative predictions about future performance.
3. Proven Track Record
Warren Buffett's success demonstrates how Value Investing can generate consistent returns over decades.
3. Built-In Protection
Undervalued stocks have already absorbed bad news, making them less prone to crashes. If you buy a $1 stock worth $2, you’re halfway to profit before the market notices
4. Compounding Over Time
Reinvesting dividends or gains from value stocks accelerates wealth growth. For example, a $10,000 investment growing at 8% annually becomes $46,610 in 20 years—without additional effort.
It has been said before that compounding is the '8th wonder' of the world.
5. Emotional Resilence
Market swings causes panic to traders and growth investors. Value investors are less affected by market volatility because they focus on long-term business performance rather than short-term price movements.
For beginners looking for an accessible entry point into value investing, ETFs (Exchange-Traded Funds) offer diversification and simplicity while adhering to value principles.
ETFs: The Perfect First Step for New Investors
What Are ETFs?
Why ETFs Align with Value Investing
- Diversification: Spread risk across sectors, avoiding the "all eggs in one basket" problem
- Low Costs: ETFs charge minimal fees compared to mutual funds
- Transparency: Holdings are disclosed daily, so you know exactly what you own.
An ETF tracking undervalued companies (e.g. a "value ETF") lets you practice value investing without analysing individual stocks - which is ideal for beginners
Final Thoughts
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Robert G Allen

Through the past 40 years, MILLIONS of people have attended his live seminars and his graduates have earned BILLIONS in profits by following his financial advice. Today there are literally thousands of millionaires and multi-millionaires worldwide who attribute their success to Mr. Allen’s systems and strategies. Empowered by his philosophy of the Enlightened Entrepreneur, his students have generously contributed over 50 million dollars to their favorite churches, causes and charities.
As a public speaker, he has spoken to audiences worldwide as large as 20,000 people, sharing stages with the likes of Sir Richard Branson, Tony Robbins, Robert Kiyosaki, Oprah Winfrey, Prime Minister Tony Blair and Donald Trump. In America, the National Speaker Association gave him an award as America's Top Millionaire Maker.
As a trainer and educator, he has spoken to groups all over the world from United States, Singapore, Mexico, Canada, South Africa, Russia, Kazakhstan, Latvia, Slovenia, Australia, Italy, England, Japan, Taiwan, Hong Kong and China. He teaches on the subjects of personal finance, wealth creation, multiple streams of income, entrepreneurship, authorship, sales, marketing and personal growth.
He is a popular media guest appearing on hundreds of radio and television programs including Good Morning America, Regis Philbin, Neil Cavuto and Larry King. He has been the subject in numerous international publications including the Wall Street Journal, The Los Angeles Times, The Washington Post, Newsweek, Barons, Redbook, Money Magazine and The Reader Digest to name just a few.
Ernee Ong

Ernee Ong is the co-founder of Proptiply, a property consulting and investment education company that builds on the concept of co-living to generate rental income. He aims to educate and empower aspiring property investors to attain their life goals through prudent and sound property investing principles.
Ernee is a loving husband to Jelene and a father to two wonderful daughters. Alongside Jelene, he is a co-founder and the driving force behind Proptiply™.
Proptiply™is a Property Education Company that empowers students with a focus on teaching them how to build cashflow by leveraging other people's resources and scaling up. Ernee has achieved remarkable success, moving from living in a 3-room HDB flat to owning a landed property and acquiring an additional one.
Ernee will be sharing insights into how individual Singaporeans or Permanent Residents (PRs) can scale up their property portfolio even with limited resources. His journey has been featured in prestigious media outlets like CNA, the South China Morning Post, and other news channels, showcasing how he managed to build an 8-figure business while overseeing 300+ properties in Singapore.
Vincent Chua

Vincent is a financial planner who specializes in investment and retirement planning. He helps people achieve their financial goals and dreams through comprehensive and customized solutions.
He has nearly a decade of experience in the financial services industry and is a Certified Financial Planner, CFP®. He is passionate about educating people on the importance and relevance of financial planning in today's world.
He grew up in Toa Payoh, a mature estate in Singapore, witnessing many senior citizens struggle with health and financial issues. They often told him that "it's better to be dead than to be sick in Singapore". This made him realize the value of money and motivated him to learn about investments at a young age. Later, he discovered the financial planning industry and decided to pursue it as a career.
He loves what he does because he makes a positive difference in people's lives. Whether it's helping them grow their wealth, protect their income, or plan for retirement, he enjoys seeing them achieve their desired outcomes and live their best lives.
Self-made Millionaire Investor
Liu Feng

Liu Feng graduated from Beijing University and came to Singapore in 1994, and went from having a mere S$100 in his wallet to becoming a millionaire. Armed with a strong determination, he made the majority of his fortune through Value Investing using principles created by Warren Buffett, one of the richest man in the world. Across the years, he has accumulated extensive experience and in-depth knowledge in stock investing.
Liu Feng specialized in stock investment. Since he first read a book about Warren Buffet in 1996, he has since done extensive studies on Value Investing Gurus – Benjamin Graham, Philip Fisher, Peter Lynch and John Neff. Through continuously fine-tuning his investment model, combined with his investment experience, he has founded a set of Investment Philosophies, Value Investing Principles and Methodologies to create passive income. Those who have been taught by him have found his teaching easy to understand as well as benefited from his many years of experience and insight on stock investments.
As an experienced value investor, Liu Feng incorporates real case studies of numerous Singapore-listed companies in his training, coupled with a systematic and proven methodology to provide a distinct advantage in the stock market.
Lauren C Templeton

Lauren C. Templeton is the founder and Chief Executive Officer of Templeton & Phillips Capital Management, LLC. Prior to founding the firm in 2001, Lauren was employed with Morgan Stanley, Homrich Berg, and New Providence Advisors, a hedge fund management company, based in Atlanta, GA.
“Author of “Investing the Templeton Way: the Market Beating Strategies of Value Investing's Legendary Bargain Hunter”, Lauren is also the great niece of Sir John M. Templeton and is a current member of the John M. Templeton Foundation, established in 1987 by renowned international investor, Sir John Templeton. She began investing as a child under the heavy influence of her father as well as her late great-uncle, Sir John Templeton.
About Sir John Templeton
Sir John Marks Templeton was born in 1912, in the small town of Winchester, Tennessee. He attended Yale University and graduated near the top of his class and as President of Phi Beta Kappa. He was named a Rhodes Scholar to Balliol College at Oxford, from which he graduated with a degree in law.
Templeton started his Wall Street career in 1938 and went on to create some of the world’s largest and most successful international investment funds. He was famous for picking companies that hit “points of maximum pessimism” (ie. Rock bottom prices). When war began in Europe in 1939, he borrowed money to buy 100 shares each in 104 companies selling at one dollar per share or less, including 34 companies that were in bankruptcy. Only four turned out to be worthless, and he turned large profits on the others.
Templeton established the Templeton Growth Fund in 1954. With dividends reinvested, each $10,000 invested in the Templeton Growth Fund Class A at its inception would have grown to $2 million by 1992. He eventually sold the family of Templeton Funds to the Franklin Group — scores of them with $13 billion in assets — in 1992, and turned to philanthropies that had engaged him for decades.
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Investing the Templeton Way with Lauren Templeton is a podcast that explores the world’s most intriguing investment topics from the overseas markets to mastering our own minds. Gather investment wisdom and educate yourself as you listen to interviews with exclusive managers, executives, and entrepreneurs on a wide range of engaging topics. Visit the Podcast Page.
Dr Todd A Finkle

Todd A. Finkle, Ph.D. is the Pigott Professor of Entrepreneurship at Gonzaga University. He has taught for 34 years at 4 different universities, publishing more than 270 articles, books, presentations, and grants.
Dr. Finkle is an expert on Warren Buffett and Entrepreneurship. His recent book titled," Warren Buffett: Investor and Entrepreneur," is published by Columbia University Press. The book traces the entrepreneurial paths that shaped Buffett’s career, from selling gum door-to-door during childhood to forming Berkshire Hathaway and developing it into a global conglomerate through the imaginative deployment of financial instruments and creative deal making.
Dr. Finkle's initial motivation for writing the book was to show the layperson how Buffett evaluates potential investments. Finkle also zeros in on Buffett’s longtime business partner Charlie Munger and his contributions to Berkshire Hathaway's success. Finkle draws key lessons from Buffett’s mistakes as well as his successes, using these failures to explore the ways behavioral biases can affect investors and how to overcome them.
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Cayden Chang

Cayden Chang is the Founder of Mind Kinesis Investments Pte Ltd and Value Investing Academy Pte Ltd, which runs the first and only Value Investing training that is recommended and endorsed by Mary Buffett, the internationally acclaimed author and speaker of how billionaire Warren Buffett invests. His company also runs Value Investing workshops across Asia. With over 50,000 graduates across 11 cities in Asia, his methodology is tested, proven and easily duplicable even for someone who has no prior experience in investing.
Cayden holds two Bachelors’ Degrees and a Masters Degree from National University of Singapore. He has also been trained in value investing by Professor Bruce Greenwald in Columbia University, the institution where Billionaire investor Warren Buffett met Professor Benjamin Graham, as well as by Professor George Athanassakos, the finance professor who holds the Ben Graham Chair in Value Investing at the Richard lvey School of Business, University of Western Ontario.
Cayden has also received the Lifelong Learners Award 2008 from the Minister of Manpower on 18 November 2008, Mr Gan Kim Yong and he was featured in “TODAY” newspaper, “938Live Online News”, “938Live Radio Station”, “Mediacorp Xin.Sg” and “The Straits Times”. He was subsequently featured in “938Live Breakfast Club” Radio, “Channel News Asia AM Live”, “Shareinvestment”, “The Edge”, and “The Exquisite” Magazine for sharing his secrets of financial success.
In July 2010, he was diagnosed with Renal Cancer. Despite being ill, he launched his first charity project in August 2010, where he donated all of the sales proceeds of his book to The Straits Times School Pocket Money Fund, and was featured on 938 Live Radio Station and The Straits Times. His fight with Renal Cancer was subsequently published in The Straits Times and interviewed on 938Live Radio Station. His life story was featured in The Sunday Times on 10 June 2012. He survived terminal stage Renal Cancer (Stage 4) in September 2014 and launched his second book titled “The Book of Hope” to raise funds for cancer research.
