Investment Fundamentals
Margin of Safety
Definition
What is Margin of Safety?
The gap between an investmentAn asset or commitment of money made with the expectation of future income, growth, or both.'s market price and a conservative estimate of its value.
Example in practice
How This Looks in Practice
An analyst values a share at ₦100 but buys only below ₦70 to create a margin of safety.
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Related Terms
Investment Fundamentals
Principal
The original amount of money invested or lent, excluding later returns.
Investment FundamentalsCapital
Money or other resources committed to produce income, growth, or another economic benefit.
Investment FundamentalsInvestment
An asset or commitment of money made with the expectation of future income, growth, or both.
Asset ClassesAsset
Anything with economic value that can be owned or controlled.