If investors like low beta, also known as low risk, then USAA measures up.
Lately, we have been thinking about combining relative strength (buying the one asset out of a basket of assets that has the strongest performance over time) with value, momentum, low beta and small stocks investing.
Warren looks for low-beta stocks with big dividends (6% and up in most cases) and lots of cash.
Low-beta stocks have performed better, on a risk-adjusted basis, than their high-beta counterparts.
ETF, for example, is weighted toward large-cap value stocks, according to Morningstar, but its low-beta characteristics helped boost performance during recent downswings.
And the effect of ignoring low-beta stocks is that they become underpriced.
In the foreign currency space, investors seem to have shifted allocations from comparatively expensive low-beta names in Latin America like Colombia into Asian currencies with upside potential.
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Recommend European quality dividend stocks and quality low-beta portfolios.
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These results are before fees, and alternative indexes have higher fees than low-cost beta-seeking index funds.
At the core of this portfolio is a low-cost, beta-seeking total stock market fund.
That's a theme that we think has to play out, this handoff from the low-quality, high-beta equities, to quality, more traditional franchise names.
Maintain an overweight in high-quality credits and prefer low-duration bonds in high-beta names.
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Using beta, that discount-rate would be unreasonably low, overstating Apple's worth.
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