Investors are naturally thought to be risk takers. However, low volatility investments point at a trend where investors seek to minimize their losses. Investors in LVI seek to still make money while reducing the risk of making losses to the least possible percentage. This makes such stock low earning options as opposed to investors who want to take advantage of sudden fluctuations.
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.
The slow gain explains why most of the investors in this segment are institutions or people with huge sums to invest. A person who intends to grow his money cannot turn to a stock that offers minimal gains. This is advantageous to such investors because huge investments will produce commendable returns even when the percentage gain is very small. 1 percent on 100 million dollar investment is still substantial. If this was to be a loss on volatile stocks, it would be a huge blow.
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.
LVI are not under-performers in all situations. There are instances when the performance is incredible, especially during a bull run. The upsurge is usually due to a rush as investors look for safer havens for their money. It means that at different points, investors who were expected to make the least returns will reap the most. However, this happens in few instances that are also far apart.
LVI provide the safest investment option for fund hedging. They will produce fantastic results when yields from bonds are not impressive. This explains why pension funds and other public funds prefer these investments. The coverage ratio is reduced because such stocks are relatively stable. For investors, fund hedging on these counters is indirect.
Identifying LV stocks in the market does not require a secret formula. Studying trends in the market can help you determine the perfect less volatile stock. The stock must be tested against different scenarios and market conditions. The most dominant players in this segment are real estate and dealers in low profile commodities. Service provision companies and new market entrants rarely join this category.
Some financial analysts are of the opinion that LVI is just a theory. This conclusion is based on market changes over years where stocks that were considered to be safe end up causing huge losses to investors through slow bleeding. This means that there is no guarantee for loss or profit. It is a matter of chance, like in every other investment option.
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.
The slow gain explains why most of the investors in this segment are institutions or people with huge sums to invest. A person who intends to grow his money cannot turn to a stock that offers minimal gains. This is advantageous to such investors because huge investments will produce commendable returns even when the percentage gain is very small. 1 percent on 100 million dollar investment is still substantial. If this was to be a loss on volatile stocks, it would be a huge blow.
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.
LVI are not under-performers in all situations. There are instances when the performance is incredible, especially during a bull run. The upsurge is usually due to a rush as investors look for safer havens for their money. It means that at different points, investors who were expected to make the least returns will reap the most. However, this happens in few instances that are also far apart.
LVI provide the safest investment option for fund hedging. They will produce fantastic results when yields from bonds are not impressive. This explains why pension funds and other public funds prefer these investments. The coverage ratio is reduced because such stocks are relatively stable. For investors, fund hedging on these counters is indirect.
Identifying LV stocks in the market does not require a secret formula. Studying trends in the market can help you determine the perfect less volatile stock. The stock must be tested against different scenarios and market conditions. The most dominant players in this segment are real estate and dealers in low profile commodities. Service provision companies and new market entrants rarely join this category.
Some financial analysts are of the opinion that LVI is just a theory. This conclusion is based on market changes over years where stocks that were considered to be safe end up causing huge losses to investors through slow bleeding. This means that there is no guarantee for loss or profit. It is a matter of chance, like in every other investment option.
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