ELS - Elevated Returns With Subdued Risks - The Low Volatility Approach

2024-03-20 07:00:00 ET

Summary

• Elevated inflation is a significant macroeconomic challenge that could persist, leading to increased volatility and downside risks.
• Low-volatility investing, which focuses on stocks with historically lower price volatility, can provide superior returns with reduced risks.
• I'll show you ten of my all-time favorite low-volatility stocks.

This article was coproduced with Leo Nelissen.

It's time to combine two important things:

• A discussion of macroeconomic challenges that could significantly increase volatility in the future and elevate downside risks after more than a year of steady returns.
• An investment strategy that mitigates downside risks without compromising on long-term returns.

Starting with the first bullet point, one of the biggest macroeconomic developments we have been discussing since 2021 is elevated inflation.

In 2021, I was in the camp of people who expected inflation to rise faster than the market anticipated. That turned out to be correct - unfortunately....

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