Investors want to get the most out of their investment without exposure to risk. Low Volatility Investments are a safe way to put money in stock markets without the risk of fluctuations that reduce the value of your investment leading to losses. This is a defensive way of investing that has been popularized by the recent global financial crisis.
The bottom line is that low volatile investment is only theoretical. It is impossible to pick a stock with certainty until market forces are applied on it over time. Until market forces act on a stock, it can never be marked as less volatile. Stock markets depend on seasons to determine their performance. This means that labeling one as less volatile at the beginning of trading can lead to natural market correction later.
Low volatility portfolio or LVP only minimizes the risk of market exposure and does not eliminate it. This is a trend that has been observed over the years. The reduction in risk means that you can earn more in the long run. However, this reduction is only dependent on market forces prevailing at the time. The long run remains unpredictable.
The returns from LVP are lower. Investors only turn to these stocks because of a lower level of exposure. For a person with better market insight and ready to take risks, LVP is not the investment of choice. This is in line with the principle of business that greater risks bring the best returns. When the risks are reduced, your rate of returns will be significantly reduced.
It is possible and easy to spot an LVP stock in the market because the characteristics are unique. The activities of the stock are usually hidden from public scrutiny because they are a bit dormant. This means that public opinion and daily market forces rarely have an impact on these activities. The investments made by parent companies are also long term. This is why short term market forces do not have an impact on the price.
To get profits from LVP, your investment must be massive. This is simply explained by the reduced returns. This trend attracts institutional investors who do not want to lose funds belonging to members. Their returns are also guaranteed because of reduced volatility. These institutions also have the patience to wait for long term gains before cashing in on their investment. Their target is never to get immediate returns.
The less volatile investments also experience bullish trading moments. The stocks are not immune to market forces and will therefore respond when the winds favor the entire market. This also means that they can experience sharp falls like all other stocks in the market. This opens a window for short term investors to make a kill or the long term investors to cash in.
The sure returns guaranteed by LVP are the reason most investors go for the stocks. If the entire market is performing well, these stocks will also perform well. When the performance is poor, the LVP will also experience a downward spiral. The only saving grace with these stocks is their long term stability that almost assures investors of profits, albeit at a reduced rate.
The bottom line is that low volatile investment is only theoretical. It is impossible to pick a stock with certainty until market forces are applied on it over time. Until market forces act on a stock, it can never be marked as less volatile. Stock markets depend on seasons to determine their performance. This means that labeling one as less volatile at the beginning of trading can lead to natural market correction later.
Low volatility portfolio or LVP only minimizes the risk of market exposure and does not eliminate it. This is a trend that has been observed over the years. The reduction in risk means that you can earn more in the long run. However, this reduction is only dependent on market forces prevailing at the time. The long run remains unpredictable.
The returns from LVP are lower. Investors only turn to these stocks because of a lower level of exposure. For a person with better market insight and ready to take risks, LVP is not the investment of choice. This is in line with the principle of business that greater risks bring the best returns. When the risks are reduced, your rate of returns will be significantly reduced.
It is possible and easy to spot an LVP stock in the market because the characteristics are unique. The activities of the stock are usually hidden from public scrutiny because they are a bit dormant. This means that public opinion and daily market forces rarely have an impact on these activities. The investments made by parent companies are also long term. This is why short term market forces do not have an impact on the price.
To get profits from LVP, your investment must be massive. This is simply explained by the reduced returns. This trend attracts institutional investors who do not want to lose funds belonging to members. Their returns are also guaranteed because of reduced volatility. These institutions also have the patience to wait for long term gains before cashing in on their investment. Their target is never to get immediate returns.
The less volatile investments also experience bullish trading moments. The stocks are not immune to market forces and will therefore respond when the winds favor the entire market. This also means that they can experience sharp falls like all other stocks in the market. This opens a window for short term investors to make a kill or the long term investors to cash in.
The sure returns guaranteed by LVP are the reason most investors go for the stocks. If the entire market is performing well, these stocks will also perform well. When the performance is poor, the LVP will also experience a downward spiral. The only saving grace with these stocks is their long term stability that almost assures investors of profits, albeit at a reduced rate.
About the Author:
Get valuable investment tips, right now. You can also get more info about great low volatility investments on our website at http://www.glidepathfinancial.com today.
