Why invest in high quality and undervalued companies is suitable for investors with limited funds?

Investing in high-quality and undervalued companies is suitable for investors with limited funds due to several reasons: 1. **Potential for High Returns**: Undervalued companies have a market value lower than their intrinsic value, indicating a potential for high returns if the market recognizes the true value of the company. This can be particularly advantageous for investors with limited funds who aim to maximize their returns. 2. **Lower Risk**: High-quality companies are generally those with strong financials, stable earnings, and a track record of consistent performance. Investing in such companies can be less risky compared to investing in lower-quality companies that may face operational challenges or financial instability. 3. **Value Investing Strategy**: Value investing, which involves investing in undervalued companies, is a well-established investment strategy that has been pioneered by renowned investors like Benjamin Graham and Warren Buffett. This strategy can be particularly effective for investors with limited funds who are looking for a disciplined approach to investing. 4. **Long-Term Perspective**: Investing in high-quality and undervalued companies requires a long-term perspective, as it may take time for the market to recognize the true value of the company and for the stock price to catch up with its intrinsic value. This aligns with the goals of investors with limited funds who are looking to accumulate wealth over time. In summary, investing in high-quality and undervalued companies is suitable for investors with limited funds due to the potential for high returns, lower risk, the value investing strategy, and the long-term perspective it requires.