Investment Fundamentals

Margin of Safety

Definition

What is Margin of Safety?

The gap between an investment's market price and a conservative estimate of its value.

Example in practice

An analyst values a share at ₦100 but buys only below ₦70 to create a margin of safety.

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The original amount of money invested or lent, excluding later returns.

Money or other resources committed to produce income, growth, or another economic benefit.

An asset or commitment of money made with the expectation of future income, growth, or both.

Anything with economic value that can be owned or controlled.

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