Investment in the stock market is always considered to be reserved for risk takers. However, a category that seeks to minimize losses through low volatility investments leaves one wondering whether it is possible to avoid losses entirely. Investors in LVI are known to target reduced losses yet be guaranteed of profits over time. They also seek immunity from sudden price fluctuations.
All investors want to reduce their risks to bare minimum. This has worked in situations of market crash. Stocks fluctuate significantly between extreme highs and extreme lows. Investors identify stocks that are shielded from such fluctuation. They put their money on such stocks because there is little chance of losing the money.
Most of the investors in this category are fund managers and institutions with huge cash and responsibilities. For instance, if you want to grow your cash, it is unlikely that you will invest it in markets that give slow returns. The profit margin of one percentage point or thereabout is not attractive to small scale investors. However, with 100 million dollars to invest for a pension fund, the small percentage gain or loss is still attractive and considerably safe.
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 analysts are of the opinion that LVI only exist in theory. The argument is that one stock may be highly volatile at one moment and then less volatile at another. If you intend to make money on the stock market, your target should be the volatile stocks. However, if you wish to minimize your losses, LVI will suit your business model.
All investors want to reduce their risks to bare minimum. This has worked in situations of market crash. Stocks fluctuate significantly between extreme highs and extreme lows. Investors identify stocks that are shielded from such fluctuation. They put their money on such stocks because there is little chance of losing the money.
Most of the investors in this category are fund managers and institutions with huge cash and responsibilities. For instance, if you want to grow your cash, it is unlikely that you will invest it in markets that give slow returns. The profit margin of one percentage point or thereabout is not attractive to small scale investors. However, with 100 million dollars to invest for a pension fund, the small percentage gain or loss is still attractive and considerably safe.
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 analysts are of the opinion that LVI only exist in theory. The argument is that one stock may be highly volatile at one moment and then less volatile at another. If you intend to make money on the stock market, your target should be the volatile stocks. However, if you wish to minimize your losses, LVI will suit your business model.
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