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.
LVI are for investors who are not ready to lose any money for whatever reason. This is a reality especially when the market crashes. These stocks are never affected by sudden fluctuations in prices. It means that your losses are significantly reduced. This is why such stocks are dominated by institutions dealing with public monies that would spell doom for the investor if the money was lost.
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.
Stocks in the LVI market are few and characteristically easy to identify. The marginal change in their prices over years is very thin. This means that they do not lose value by large margins or gain by such margins. The stocks are also cushioned from a lot of market information. For instance, a tech company would see its shares plummet within minutes of regulatory news. However, the price of real estate stocks remains relatively stable even with major announcements.
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.
Most of the investors in LVI engage in fund hedging by placing their money on such stocks. The most rewarding moment for low volatility investors is when earnings from bonds become less impressive. This is why public fund managers like pension funds prefer such investments. Because of a reduced coverage ratio, these stocks experience incredible stability. Fund hedging in this case is performed indirectly.
LVI do not come with any secret formula. It takes time to study the market and find the perfect stock for investment. You need to test the stock against different market scenarios since market conditions change. Dominant players in this sector include real estate companies and others dealing in low key businesses and commodities. It is rare to find a service provision company in this segment.
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 are for investors who are not ready to lose any money for whatever reason. This is a reality especially when the market crashes. These stocks are never affected by sudden fluctuations in prices. It means that your losses are significantly reduced. This is why such stocks are dominated by institutions dealing with public monies that would spell doom for the investor if the money was lost.
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.
Stocks in the LVI market are few and characteristically easy to identify. The marginal change in their prices over years is very thin. This means that they do not lose value by large margins or gain by such margins. The stocks are also cushioned from a lot of market information. For instance, a tech company would see its shares plummet within minutes of regulatory news. However, the price of real estate stocks remains relatively stable even with major announcements.
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.
Most of the investors in LVI engage in fund hedging by placing their money on such stocks. The most rewarding moment for low volatility investors is when earnings from bonds become less impressive. This is why public fund managers like pension funds prefer such investments. Because of a reduced coverage ratio, these stocks experience incredible stability. Fund hedging in this case is performed indirectly.
LVI do not come with any secret formula. It takes time to study the market and find the perfect stock for investment. You need to test the stock against different market scenarios since market conditions change. Dominant players in this sector include real estate companies and others dealing in low key businesses and commodities. It is rare to find a service provision company in this segment.
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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