High Returns from Low Risk: A Remarkable Stock Market Paradox

by Pim Van Vliet, Jan De Koning

HIGH RETURNS from LOW RISK If you lie awake at night worrying about your retirement, paying for your children’s schooling or your general financial security, High Returns from Low Risk is your solution to a sound sleep. This unique wealth management guide is written by a fund manager who oversees billions of dollars in portfolio assets, and who wants to share his approach with individual investors, advisors, bankers and everyone interested in the stock market. Despite all the appeal exciting stocks have, his evidence-based strategy repeatedly proves low-risk stocks historically beat high-risk ones going back well over eighty years. By how much? Over eighteen times the returns! Growing wealth doesn’t have to be stressful, and it shouldn’t be risky when you get High Returns from Low Risk . ‘The low-risk effect, that is the idea that historically, unlike many well-known theories, average return across stocks doesn’t appear to go up with most standard measures of risk, is one of the most important “anomalies” in modern finance. Pim van Vliet is one of the pioneers in studying this effect and using it to improve investor portfolios. Anyone interested in systematic equity investing should carefully read this important book.’ ― Clifford S. Asness, Founder, Managing Principal and Chief Investment Officer at AQR Capital Management, USA ‘Pim van Vliet’s experience as one of the pioneers of low-volatility investing gives him unique insight into one of the most fascinating economic anomalies of our time. The idea that risk, properly defined, generates a positive return, is one of those ideas that becomes even more profound when we learn it is not true. There is no cosmic risk karma that pays people for taking risk, and this book will help people understand what types of investment risks generate premiums, and which will actually cost you money.’ ―Eric Falkenstein, Author of The Missing Risk Why Low Volatility Investing Works, USA

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

176 pages, Hardcover

Published January 17, 2017

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.