High Returns from Low Risk: A Remarkable Stock Market Paradox

by Pim van Vliet, Jan de Koning

Overview

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 Premium: Why Low Volatility Investing Works, USA

Product Details

ISBN-13:	9781119351054
Publisher:	Wiley
Publication date:	01/17/2017
Pages:	176
Sales rank:	840,942
Product dimensions:	5.70(w) x 8.50(h) x 0.80(d)

About the Author

PIM VAN VLIET, PhD, is the Founder and fund manager of the multi-billion dollar Conservative Equity funds at Robeco. These low-risk funds are based on academic research and provide investors with a stable source of income from the stock market. Pim is a guest lecturer at several universities, the author of numerous financial publications and travels the world advocating low-volatility investing.

JAN DE KONING, CFA, CAIA, CMT is an investment specialist for Robeco’s quantitative equities strategies and conducts client and consultant meetings, speaks at conferences, and gives seminars on low-volatility investing. In the past, he published regular investment updates and was an investment advisor, portfolio manager and fiduciary manager for institutional investors.

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Table of Contents

Introduction 1

Chapter One The Opposite of What You’re Aiming For 5

Chapter Two Mr Thrifty Enters the Stock Market 11

Chapter Three The Tortoise Beats the Hare 19

Chapter Four A Little Bit Is Enough 29

Chapter Five Ignoring the Eighth Wonder of the World 35

Chapter Six It’s All a Matter of Perspective 43

Chapter Seven The Dark Appeal of Risk 53

Chapter Eight Buy Them Cheap and Remember the Trend Is Your Friend 59

Chapter Nine All Good Things Come in Threes 67

Chapter Ten Spotting Tortoises and Hares 77

Chapter Eleven Slice and Dice, But Do It Wisely 83

Chapter Twelve Sit Back and Relax 91

Chapter Thirteen Trade Little, Be Patient 101

Chapter Fourteen The Biggest Victory of All 109

Chapter Fifteen The Golden Rule 117

Chapter Sixteen The Paradox Is Everywhere 123

Chapter Seventeen Will the Paradox Persist? 129

Chapter Eighteen Final Reflections 133

Epilogue Jan’s Perspective 137

Appendix ParadoxInvesting.com 143

Acknowledgments 145

References 147

Index 151