Building a Stable Portfolio with Low Volatility Stocks

Low volatility stocks are becoming an increasingly popular investment choice for traders seeking reliable returns. Investors who favor a cautious trading strategy may find low-volatility stocks to be suitable since they tend to be less unstable compared to their high-risk counterparts.

While the returns from low volatility stocks may not be as spectacular as those from high-risk stocks, they tend to be more stable over time.

One of the main advantages of low volatility stocks is that they offer a hedge against market downturns, which can be particularly valuable during times of economic uncertainty. In addition, low volatility stocks can provide consistent returns over the long term, as they are less susceptible to sudden price swings that can disrupt a portfolio.

Investors looking to take advantage of the benefits of low volatility stocks have a wide range of options available to them. In this article, we will introduce some of the best low volatility and cheap stocks that traders can invest in today. Whether you are a seasoned investor or just starting out, these stocks offer a great opportunity to build a reliable and profitable portfolio.

Why You Should Put Low Volatility Stocks in Your Trading Plan

Investing in low volatility stocks can be a good strategy for traders who are looking for a more conservative approach to the stock market. These stocks tend to be less risky than high-risk stocks, and as a result, they offer a more stable investment option. Low volatility stocks can be a good choice for traders who are concerned about market volatility or who want to avoid sudden price fluctuations that can affect their portfolio.

Low volatility stocks are often less volatile because they represent companies that have stable earnings, consistent dividends, and lower levels of debt. These characteristics make them less susceptible to market shocks and changes in interest rates, which can affect other types of stocks. As a result, low volatility stocks can offer more stable returns over the long term, although these returns may be lower than those from high-risk stocks.

In general, these stocks tend to offer lower returns than high-risk stocks, but they also tend to be less risky. As a result, investors who are willing to trade off the potential for high returns for greater stability may find that low volatility stocks are a good choice.

Beginners may be drawn to these stocks because they offer a more conservative approach to trading that can be easier to understand and manage. Experienced traders may appreciate the stability and consistency of these stocks, which can help them manage their portfolios more effectively.

Before investing in low volatility stocks, it is important to consider a number of factors. These include the company’s financial health, the stock’s historical performance, and the broader market conditions. Investors should also consider the stock’s valuation and any potential risks or uncertainties that could affect its performance.

In summary, low volatility stocks offer a stable investment option for traders who are looking for a more conservative approach to the stock market. Whether you are a beginner or an experienced trader, it is important to carefully consider the features and performance of low volatility stocks before investing in them.

Top Low Volatility and Cheap Stocks You Can Invest in Today

Berkshire Hathaway

Berkshire Hathaway (BRK.A -1.11%)(BRK.B -0.81%) is a diversified conglomerate that possesses around 60 subsidiary businesses, including Duracell, GEICO, and BNSF, a rail transport business. These companies, along with several others, are mostly non-cyclical, meaning they typically perform well regardless of economic conditions.

Moreover, Berkshire has a significant stock portfolio, comprising large positions in well-established companies such as Coca-Cola (KO -0.56%), Apple (AAPL -0.65%), Bank of America (BAC -1.06%), and more. Essentially, holding Berkshire’s stock is like owning several investments in one. Additionally, most of these stocks were selected by the company’s CEO, Warren Buffett, widely recognized as one of the greatest investors ever.

Due to the varied nature of its holdings, Berkshire can be an excellent option for novice traders seeking secure stocks. It provides the advantage of purchasing a diversified portfolio in a single investment.

Tencent Music Entertainment

Tencent Music Entertainment is a prominent web-based music platform operating in China and owns several subsidiary music streaming services, including KuGou Music, QQ Music, and WeSing. The performance of Tencent Music has been affected by regulatory constraints from both Chinese and U.S. authorities in recent years, which have impacted several U.S.-listed Chinese tech stocks.

Nevertheless, according to analyst Ahmad Halim, revenue from online music streaming is expected to recover in 2023, leading to improved margins. Halim further notes that the competition from TikTok and other entertainment platforms that have negatively impacted Tencent Music will dwindle in the upcoming quarters. CFRA has assigned a “buy” rating to TME stock with a price target of $8, while the stock ended at $7.36 on April 24.

Procter & Gamble

Procter & Gamble (PG -0.13%) is a company that produces essential products required in every economic condition. The household staples brands such as Charmin, Gillette, Downy, Tide, Old Spice, Pampers, and Febreze are all under the parent company, P&G.

The reliability and stability of Procter & Gamble’s business can be estimated from the fact that the company has raised its dividend for 66 straight years, making it one of the most impressive dividend records in the entire stock market.

Starbucks

It would be challenging to discover a brand with a more significant competitive edge than Starbucks (SBUX -9.17%). Its reputable brand provides the company with superior pricing power over competitors, while its enormous scale also provides it with efficiency advantages. Being such a large corporation, Starbucks can charge a premium while benefiting from cost efficiencies.

Starbucks has been able to increase its revenue and market presence continuously year after year. It is hard to visualize a scenario where Starbucks is not the top preference for premium coffee drinks. Even amid the COVID-19 pandemic, Starbucks had to close its indoor seating areas. Still, customers continued to visit Starbucks drive-thru lanes to grab their preferred beverages.

Telecom Italia

Telecom Italia is the leading wireless and fixed-line telecommunication service provider in Italy. The company aims to divide its network business into separate entities. Although the telecommunication industry is not famous for its significant growth figures, Telecom Italia’s 28.5% increase from 2023 until April 24 is noteworthy.

According to Ng, merger and acquisition prospects, including the potential divestiture of its network business, could be favourable catalysts for the stock. Ng also highlighted Brazil as a particularly appealing growth opportunity. CFRA has given a “buy” rating and a price target of $3.50 for TIIAY stock, which was at $2.95 on April 24.