Low-volatility stocks (those with modest price fluctuations, compared to their brethren) are considered relatively low risk. Nevertheless, they’ve outpaced roller-coaster issues for decades. “The empirical evidence is clear and has been since the work done by Dr. Robert Haugen in the 1970s,” asserts Feifei Li, director and head of research at Newport Beach, California-based Research Affiliates. Writing in her firm’s Simply Stated publication, Li suggests that investors include a low-volatility component in a diversified portfolio.
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