High Returns from Low Risk: A Remarkable Stock Market Paradox

by Pim Van Vliet

Believing "high-risk equals high-reward" is holding your portfolio hostage High Returns from Low Risk proves that low-volatility, low-risk portfolios beat high-volatility portfolios hands down, and shows you how to take advantage of this paradox to dramatically improve your returns. Investors traditionally view low-risk stocks as safe but unprofitable, but this old canard is based on a flawed premise; it fails to see beyond the monthly horizon, and ignores compounding returns. This book updates the thinking and brings reality to modelling to show how low-risk stocks actually outperform high-risk stocks by an order of magnitude. Easy to read and easy to implement, the plan presented here will help you construct a portfolio that delivers higher returns per unit of risk, and explains how to achieve excellent investment results over the long term.Do you still believe that investors are rewarded for bearing risk, and that the higher the risk, the greater the reward? That old axiom is holding you back, and it is time to start seeing the whole picture. This book shows you, through deep historical simulation, how to reap the rewards of smarter investing.Learn how and why low-risk, low-volatility stocks beat the market Discover the formula that outperforms Greenblatt's Construct your own low-risk portfolio Select the right ETF or low-risk fund to manage your money Great returns and lower risk sound like a winning combination -- what happens once everyone is doing it? The beauty of the low-risk strategy is that it continues to work even after the paradox is widely known; long-term investment success is possible for anyone who can shake off the entrenched wisdom and go low-risk. High Returns from Low Risk provides the proof, model and strategy to reign in your exposure while raking in the profit.

Genres: Finance, Business, Nonfiction, Personal Finance, Audiobook, Money, Economics

168 pages, Kindle Edition

Published November 21, 2016

Reviews

[Ajay · Rating 5 out of 5]

Low Historical Volatility, along with income( dividend yield + buybacks = shareholder's yield ) and 12 month momentum outperforms high volatility stocks...

Good Idea, an excellent strategy for portfolio diversification...

[Nouvel Diamant]

Im am not sure I would 'trust' this book from a 2022 perspective and going forward:

a) Page 97 lists as 'proof of the pudding' seven large and experienced low-risk equity managers:
- Most of them did not survive
- the few that survived (still) achieved disappointing performance according to Morningstar

b) Same with the four emerging market low-volatility strategies on the following page

What is nice is the internet page www.paradoxinvesting.com. Although, not everything that is referred to in the book still seems to have survived there. Further, this site rather reads like a marketing slingshot...

[Samuel · Rating 4 out of 5]

It is a must read for everyone that wants to begin investing. Not only does it use evidence-based articles for its general statements, it provides some specific resources and steps in order to help the reader make financially intelligent decisions as well.

[Nick Clark · Rating 3 out of 5]

A readable, non-technical yet comprehensive introduction to min-vol investing. Well executed for what it sets out to do.

[alberduris · Rating 4 out of 5]

Curioso libro que presenta una estrategia de inversión de bajo riesgo. A pesar de que aporta muchos datos y referencias me ha dejado con alguna duda al respecto, pero supongo que esto agradaría al escritor. En cualquier caso es un libro divertido y ameno que recomiendo leer, y a quien le intrigue lo suficiente la estrategia, que la investigue más. Quizás yo lo haga en algún momento, o quizás no. He de decir que aunque sea un "pequeño libro" no me parece demasiado recomendable para principiantes, a pesar de que el libro no tiene nada especialmente complicado, creo que hay títulos mejores, más generales, que no traten sobre una estrategia en particular. ¿Como cuáles? Podéis verlo en cualquiera de mis otras reviews en las que comento que me parece apropiado para un principiante.

[Janp · Rating 4 out of 5]

A clear and concise argument on how low risk investing gives you the best results and most peace of mind. Funny, open, crisp and compact. Although it tries to persuade the reader to change behavior, it’s not pushy nor annoying. On the contrary, with the right amount of self-mockery and relativity it gives food for thought. As a novice investor I am definitely inclined to change my investing behavior!

[Andre Cordeiro · Rating 4 out of 5]

Great book! Its main goal is to show the existence of an investment paradox, in which low risk stocks outperform high risk stocks. I found it very useful since the book outlay a clear strategy in how to identify which stocks are better for the long term. Highly recommended to those interested in long term investing!

[Pedro · Rating 5 out of 5]

Muy buen libro para aquellos interesados en las finanzas pero que no necesariamente pertenecen a ese mundo. Claro, ameno, conciso, convincente y divertido. De fácil lectura (3-4h) y con un mensaje que se transmite eficazmente: la inversión de bajo riesgo (estadísticamente) da mejores rendimientos. Lo recomiendo totalmente.

[Mark · Rating 2 out of 5]

Written for someone who is a complete neophyte to investing (almost as if pandering to a child). I was looking for something a bit more technical, as I imagine most who have found their way to min vol investing are. Ultimately ends up recommending a 3 factor approach anyway (min vol, value, momentum)

[Oscar Mauricio Lopez Gonzalez · Rating 5 out of 5]

Buena lectura! Mas libros así.

Un libro que llama la atención leer y aplicar en nuestras inversiones personales. No hay que dejarlo de leer y aplicar.

[Nguyen Minh · Rating 5 out of 5]

Strong recommendation for people learning how to build a sustainable portfolio and even those in the Finance industry. Extremely simple language and clear example and a sprinkle of great humor.

[Fabio · Rating 4 out of 5]

Simple thought process, explained straight to the point rather than a 500 page book. Quick easy read. Recommended.

[Rafael · Rating 5 out of 5]

Excelente livro! Adorei o a métrica de beta/momentum/dividendos em um portifólio de baixo risco.

[Cem · Rating 4 out of 5]

Good book for absolute beginners with some and tangible practical advices.

[Nada | ندى · Rating 3 out of 5]

It has interesting concepts.

[Shrey Tripathi]

New perspective for trading and investment.

[Ryan Madden · Rating 5 out of 5]

Great book! Very readable and elaborates an interesting investing thesis in a short amount of time. I really enjoyed it!

[Dan Dawson · Rating 1 out of 5]

If you believe this, just buy USMV or SPLV. Results since 2009 not impressive.

[Mukund · Rating 3 out of 5]

Good introduction for low volatility investing but it needed to be way less vague.

[Hercules Merscher · Rating 4 out of 5]

A good (to the point) introductory book on the topic.