Focusing your portfolio on these stable and established companies is known as “low volatility investing” because it results in a portfolio with less variability in value over time.
The story of the hare and the tortoise is a favourite of children worldwide. In the story, the persistent and determined tortoise unexpectedly wins a race against a fast but overconfident hare. While seemingly unrelated, the fable offers a valuable lesson to investors, particularly in today’s volatile markets.
Many investors are drawn to the excitement and buzz around the latest “hare-like” stocks that dominate news and social media. However, such stocks can be unpredictable and risky. Research shows that investing in less exciting “tortoise-like” stocks, which exhibit steady (often more predictable) growth over time, can be more effective in the long run.
