Time to stop chasing alpha and shift to low beta stocks – Economic Times

The common perception among investors is that a portfolio made up of low volatility stocks results in a sub-par performance compared with the benchmark indices.

Synopsis

Risk-adjusted returns are effective at beating volatility and delivering returns, too.

The measurement of risk to stock returns has always been of paramount importance in the field of investing. The rising volatility in the stock market makes the case for risk-adjusted returns even stronger. In a volatile market, the preference shifts to stocks that would generate above-market returns with a low volatility per unit rather than merely chasing market-beating high returns or alpha. Globally, investment in low-volatility instruments

BY

ET Bureau

3 mins read, Last Updated:

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