Less Risky Assets Out Perform? Study Says Yes-Maybe (How is My Stock Strategy Doing?)

Let me say that I'm not the world's greatest investor but I do like to dabble like many other Americans. So when I get a chance I do read about stocks and engage some investing from time to time. I'm trying to create a system that sort of beats the odds most of the time and generates a return on invested assets. However, I'm not in a rush to do so and think of it more as a hobby. As a disclaimer this is not stock advice at all. You might not want to listen to me because I'm sort of just playing with ideas, I might even try a few silly ideas and lose money. 

(When was the last time you met someone who was honest enough to say "Don't listen to me!"?). 

I read this article on low-risk anomalies and how low-risk stocks more earn more than more risky strategies. Considering people hate to lose money I thought it was interesting. First, we can turn to a definition from Investopedia of what a low-risk anomaly is HERE. These are sort of things that differentiate from predictions of financial and economic models. 

What we know about the low-risk anomaly: a literature review

My model I'm creating looks at selection of stocks within a certain value range and certain growth industries. They ae also selected in part based on analyst perspectives as well as how they fit within a long-term perspective. No day trading in this thought process. This is sort of what I have figured out. 

1. Find a range of value to look at in terms of stock price. I'm looking at lower priced stocks that have room to grow.

2. Use current and future market trend projections to determine whether they fit in an upward swing. 

3. Diversify among multiple stocks in different industries versus a single type of stock to protect the whole portfolio. 

4. Look for stocks that hedge each other. When stocks are declining in some arenas, they may grow in others.

5. Undefined...still thinking about it. That is as far as I got. :) To be continued.....

Happy hunting my fellow broad based capitalists! Broad based capitalism is an idea that that strong systems generate wealth at various socio-economic levels. You may be interested in a traditional definition of capitalism,  IMF-What is Capitalism?