It is easy to assume that all investors are good at taking risks. Low Volatility Investments have taught the world that some of the investors are not in it for the adrenaline that comes with risks. They will invest in stocks making little gains as long as their risk is minimized. However, the debate is whether these investments offer the promised returns and whether they are worth it.
LVI is reserved for investors who want to minimize their losses to the bare minimum. They are especially cautious of losing money in market crashes that wipe out investments in terms of millions. With no sudden price changes, the money invested remains safe and can thus maintain its value over the long run. This explains the preference of such stocks by institutions dealing with public money.
With low profit margins, one wonders why an investor would opt for such stocks. However, the dominant players in this industry will give you a clue. Naturally, an investor wants to grow his fortune. However, it would be disastrous for an institution to lose public money. This is why investors like pension funds are attracted by the small margins to choose these stocks. A pension fund would still gain a million dollars if it invested 100 million. However, such gains would not impress a private investor who wants to grow his fortune.
There are very few LVI in stock markets and they can easily be identified. One of their characteristics is the marginal changes in stock prices over a long time. Their stocks do not experience huge changes in pricing. Business or market information does not lead to huge changes in their prices. An example is the reaction tech company stocks have compared to real estate stocks. Investors are more interested in preserving their fortune.
It is not obvious or true that LVI always under-perform. In some case, the performance is incredibly impressive. Investors consider them to be a safe haven and will invest there when other stocks are unpredictable. This turns tables for investors whose target is long term value. Such incidences are few and far apart.
LVI are perfect for hedging funds. They usually outperform other stocks whenever yields from bonds go down. This is why pension funds prefer such investments. The stability offered by LVI leads to a reduction in coverage ratio. This is why the segment is used by investors to hedge their funds indirectly.
There is no secret formula for identifying LVI. You need to study the market over sometime. You will identify a trend in different situations where the performance of particular stocks reacts in a particular way. The most common traders are real estate and companies that are not hugely affected by news items. The most common stocks are real estate and commodity companies that are established as well as deal with mandatory or non-optional goods.
Some financial quotas think that LVI only exists in theory. This is because of market changes over years that lift the lid of safety off these stocks. Another concern is the slow bleeding that investors face. The small changes in value could be downwards leading to long term losses. With no guarantee of profit or loss, it means that the investor is just chancing.
LVI is reserved for investors who want to minimize their losses to the bare minimum. They are especially cautious of losing money in market crashes that wipe out investments in terms of millions. With no sudden price changes, the money invested remains safe and can thus maintain its value over the long run. This explains the preference of such stocks by institutions dealing with public money.
With low profit margins, one wonders why an investor would opt for such stocks. However, the dominant players in this industry will give you a clue. Naturally, an investor wants to grow his fortune. However, it would be disastrous for an institution to lose public money. This is why investors like pension funds are attracted by the small margins to choose these stocks. A pension fund would still gain a million dollars if it invested 100 million. However, such gains would not impress a private investor who wants to grow his fortune.
There are very few LVI in stock markets and they can easily be identified. One of their characteristics is the marginal changes in stock prices over a long time. Their stocks do not experience huge changes in pricing. Business or market information does not lead to huge changes in their prices. An example is the reaction tech company stocks have compared to real estate stocks. Investors are more interested in preserving their fortune.
It is not obvious or true that LVI always under-perform. In some case, the performance is incredibly impressive. Investors consider them to be a safe haven and will invest there when other stocks are unpredictable. This turns tables for investors whose target is long term value. Such incidences are few and far apart.
LVI are perfect for hedging funds. They usually outperform other stocks whenever yields from bonds go down. This is why pension funds prefer such investments. The stability offered by LVI leads to a reduction in coverage ratio. This is why the segment is used by investors to hedge their funds indirectly.
There is no secret formula for identifying LVI. You need to study the market over sometime. You will identify a trend in different situations where the performance of particular stocks reacts in a particular way. The most common traders are real estate and companies that are not hugely affected by news items. The most common stocks are real estate and commodity companies that are established as well as deal with mandatory or non-optional goods.
Some financial quotas think that LVI only exists in theory. This is because of market changes over years that lift the lid of safety off these stocks. Another concern is the slow bleeding that investors face. The small changes in value could be downwards leading to long term losses. With no guarantee of profit or loss, it means that the investor is just chancing.
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