Steady Stocks Are For All Seasons

When market volatility is on the rise, it is the low volatility stocks that come into high demand. But the question that investors need an answer to is whether the low volatility stocks outperform in the long run on a consistent basis. Shreya Chaware throws some light on the subject that matters most to long-term investors i.e. consistency in low volatility stocks

- Shreya Chaware

Beating the markets consistently is a professional game. There are many instances of investors beating the market in the short term; however, there are very few success stories of beating the markets consistently in the long term. And those investors that are able to do so are often given celebrity status, both globally as well as in India. Interestingly, ace investors Warren Buffet or Rakesh Jhunjhunwala seem to be trending on the internet these days than film actors! ‘Consistency’ in beating the markets is the keyword here. How do you beat the markets consistently and which stocks should you hold in your portfolio to beat the markets consistently?

Which is the best strategy to adopt – growth investing, value investing, high dividend yield stocks investing, or penny stocks investing? There are different approaches to beating the markets in the long term. The normal perception amongst investors is that one can expect higher returns for every unit of higher risks adopted. This would suggest that those investors who want higher returns should ideally invest in high-risk stocks. It also literally indicates that those investors who consistently invest in high-risk stocks can expect to get high returns and beat the market indices. Here is where the stock market practicalities and empirical evidence question this assumption and actually completely contradicts the notion of high risk equating to higher returns in the equity markets.