3min chapter

Masters in Business cover image

Cliff Asness on Quant Value Investing

Masters in Business

CHAPTER

What Is Low Risk Investing?

Low risk investing at its simplest. High beta stocks are supposed to return more on average than low beta stocks. But within the market, the so-called security markets line is pretty much entirely flat. You can use this in a number of ways: buy, you can make your portfolio out of low beta stocks and earn as much money with smaller swings. If you did that on a dollar long and a dollar short, you're just massively short the market.

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