New Delhi, Sept. 3 -- Value investing means buying a stock or asset that is trading below what an investor believes to be its intrinsic or true value, with the expectation that the valuation gap will eventually narrow.

Investors typically use metrics such as the price-to-earnings (P/E) and price-to-book (P/B) ratios to identify stocks that appear inexpensive.

However, a low valuation does not necessarily mean an investment is undervalued. It could be a value trap - a stock that looks cheap because its price or financial ratios are attractive, but whose underlying business continues to deteriorate. In such cases, the expected recovery in valuation may never happen.

The Bank of India Value Fund NFO presentation identifies "eight ways a c...