It has been a great year for the stock market, with all the major indexes trading new record highs. With the market strength, investors have enjoyed nice gains through the year, and with just a few months left before end of the year, you may be looking for some safe stocks to buy in order to protect some of your gains.
You must understand that there is no such thing as a “sure thing” when it comes to investing, and any stock can easily turn south, but if you want to protect your profits a bit, you should consider buying stocks that have low volatilities. The lower the volatility, the less a stock will move lower if the overall market runs into selling pressure.
The quickest way to find stocks with low volatility is by screening for stocks with low betas. Beta is a measure of volatility, and any reading less than 1 indicates that the underlying security is less volatile than the overall market, and should lose less in weak markets, but also gain less in up markets.
Investing in stocks with low volatility means that you sacrifice some upside potential if the market shoots higher, but you make that sacrifice in order to to safeguard the gains you have earned during the first nine months of the year.
Let’s take a look at five stocks that have performed well during the year, but have low volatilities that you can use to protect your assets during the remaining three months of the year.