In high-volatility markets like the one we’re in now, low-volatility investing can offer considerable comfort. But it can also offer excess returns. In this article, I’m going to single out six basic factors (and their variations) that investors should explore when designing a low-volatility model, and I’m going to present an actual model on Portfolio123.com that can form a good basis for your investments.
1. Low price volatility. This is simply the standard deviation of daily (or weekly) returns. Stocks that are stable and steady in terms of price volatility tend to remain that way.