The chaos in financial markets--to say nothing of exploding volatility--has been a windfall for exchange operators.
Stephen Hammers : Yeah, we actually have several indexes on many different asset classes called the CEMP Volatility-Weighted Indexes.
Though I expect continuing volatility -- and perhaps more shocks -- I would still stick with the better growth stocks, especially the pharmaceuticals.
In back-tests to 1994, we've found that high overall scorers with low-volatility scores outperform those with high-volatility scores.
Adding a low-volatility tilt could have improved performance, since low-volatility stocks tend to hold up better during market routs.
Yet the price of low-volatility stocks tend to be depressed compared with their high-volatility brethren, notes Haugen.
It's a tribute to the proliferation of hedge funds in the last two years and to the relatively low-volatility, sideways-moving equity markets that have put a serious crimp in investing strategies.
Capture the volatility in-between and take advantage of trading ranges while being cognizant of the trend for the stocks you are trading.
So is the likely effect on share-price volatility of quasi real-time data: would it make some investors even more short-termist in their outlook?
This flash memory manufacturer has shown some volatility year-to-year in NOPAT, but over the longer term it has achieved a 52% compounded annual growth rate in NOPAT over the past nine years.
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Both products aim to marry the popular low-volatility strategy with the similarly popular high-yield equity strategy.
Although the Bretton-Woods system (1948-1971) was a pseudo-gold-standard manipulated by central banks, it was far superior to the fiat paper regimes seen since 1971, which have contributed so much to the boom-bust cycle, to unprecedented market volatility, over-leveraging, government budget deficits, debt crises, and economic stagnation.
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The broad market is vulnerable to trading in a range during the next few weeks, so you might find index premium-selling attractive, with the CBOE Market Volatility Index near 17 and SPX 20-day historical volatility at 10.05.
One low-volatility stock is Fortune Brands (nyse: FO - news - people ), which has a 52-week beta of 0.52 and a Barra Risk Factor of only 5.
The recent increase in volume is accompanied by an explosion in volatility: The CBOE Nasdaq Volatility Index, reflecting short-term expectations of volatility in the Nasdaq 100 Index, surged to 80 from 20 or so between mid-2006 and October of last year.
Many legit money managers sold Bernie-like low-volatility constructs to investors, promising a rate of return at least twice T-Bills.
Some savvy investors with the discipline of opting for the low-volatility stocks have achieved the unexpected: outperform both the market and their more volatile peers over at least a 10-year period.
Merc looks at energy futures trading as a way to diversify and add more volatility to its mix of products--traders love volatility and high daily volumes and so do the exchanges where they operate.
The eight-week average of this ratio, which smooths out the week-to-week volatility, is an even more bullish 1.03-to-1.
Earlier this month, regulators announced a ban on short-selling until November after the global market volatility caused a six-day sell-off.
Riverfront estimates that low-volatility stocks as a group are 30% to 40% overvalued.
For those who can't stomach the swings, low-volatility stocks are looking mighty attractive.
"Investors shouldn't be surprised to see plain-vanilla equity funds repositioned as 'low-volatility' vehicles, " says Shannon Zimmerman, a fund analyst at Morningstar.
But when equities rally, as happened last year, lower-volatility stocks can trail.
Given the super-low-volatility uptrend in the market this past week, an added dose of volatility would support the case for a trend reversal.
Options implied volatility on Hewlett-Packard earlier rose to 56.05%, but currently stands 20.05% higher on the session at 53.47% as of 1:40 pm ET.
But opting for a low-volatility manager also has huge potential drawbacks.
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His major preoccupation: Investing in low-volatility stocks that, according to his data studies and portfolio performance, have shown they beat the market and produce higher returns.
But in times when there is increased volatility, actively-managed mutual funds and banks can employ strategies that can help lower their exposure and risk to the market.
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This is not as a surprise as MRAM combines the best characteristics of RAM and Flash in a single memory that offers high performance, unlimited endurance and non-volatility.
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