What is the most asked question when it comes to investing in the stock market?  
What influences the share price of companies? 
Put it another way, what factors affect the stock price? 

Stock prices rise and fall due to fluctuations in supply and demand. When more people want to buy a particular stock, its price will rise. If more people want to sell a stock, its price will fall. Put simply if there is negative news in the market traders are more likely to sell, and the price will go down.

For all those of you who wish to invest with the less risk but desire some exceptionally good returns, the usual practice of searching for stocks from sound companies which are temporarily low priced is definitely a good place to start with. This practice which is also called value investing has been in place since decades and can give you immense success with the little experience in stocks.

If you plan to earn good money from the stocks and would like to be on your way to a great retirement without indulging in some great risks, then you must surely try value investing. If you use it in a proper way, then the usage of this strategy permits you to trade safely by using the proven formula which offers lesser risks but huge returns with time.

The basic core of value investment strategy is to look for the stocks which are currently being traded below their actual worth. This means that you just need to locate the well established companies whose stocks have dipped temporarily in the stock market. Now when this company's share bounce back when the markets recover, then you will have high value stocks with you which you can sell to rake in profits.

For searching such value stocks, you must look for the strong fundamentals and not just low priced stocks. They must also have historical performance in terms of earnings, cash flow, book value and dividends. This is so because the cheap stocks are not always the best bets, and buying these cheap stocks all the time can turn out to be a huge risk for you as each startup company will never perform like Apple.

A great example for this can be of McDonalds which was a strong stock historically but dipped in the nineties. Now it is currently holding a very high position in the stock market. Everybody who used the value investing in the nineties when the stock market was at its lowest is now sitting pretty on either a solid stocks portfolio or has cashed out his investment.

In order to use the value investing mechanism properly and to your advantage, you must buy each stock as if you are buying a part of that company and is not just doing it for trading purpose. This will assist you in getting less concerned about the external factor which may affect your newly owned company which will surely turn it much easier to see as to how this value investing can eventually pay out.

As in any business you might be interested in, it is important that you know what you are getting into before jumping into it. Value investing can provide you with the basics and will be a good foundation for you if you intend to get into the long-term stock investment. You will learn what the good stocks are, where and how to look for them. This is extremely important as you have to know how to determine if stocks are potential winners and would become a great long-term investment.

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