5 Market-Beating Yields Defying This Downturn

5 Market-Beating Yields Defying This Downturn

Relaxed serene pretty young woman feel fatigue lounge on comfortable sofa hands behind head rest at ... [+] home, happy calm lady dream enjoy wellbeing breathing fresh air in cozy home modern living room In the current environment, with more downside likely to come, one of the best things you and I can do is nothing. … or at least, next to nothing. I recently wrote about the virtues of a "no beta" portfolio—basically holding on to cash until it's time to "back up the truck" at a major market bottom. But I left the door open—"if you must buy, please promise me you'll keep it low beta. It's the next best option to low-beta cash"—and for good reason. The Case for Low Beta "Anyone who studies finance learns early on that risk and reward go hand in hand and that with higher expected returns come higher risks. Therefore, low-volatility portfolios, which are by definition less risky than the market average, should underperform." That's a quick recap of the conventional wisdom from S&P Dow Jones Indices Directors Fei Mei Chan and Craig Lazarra, reporting on a study of low-volatility stocks from the end of 1991 through the end of 2018.