The Paradox of Low-Risk Stocks Kent HargisChristopher W. Marx IN THIS PAPER: Contrary to conventional wisdom, research shows that less volatile stocks tend to beat the market over the long term, in part by losing less in downturns. Our own research found that an active approach that combines low volatility and high fundamental quality produced even stronger performance. Because of its countercyclical behavior in market slumps, this strategy can be used as a source of uncorrelated alpha or as part of a plan’s overall risk management..