The most effective way to lose weight is to create a caloric deficit. You do this by burning more calories throughout the day than you eat. There are two ways to create this deficit, eat less or exercise more. Low calorie diets are a good way to lose weight quickly. You can create a much larger caloric deficit through dieting than you can though exercise. The challenge is that most of the time we want to lose body fat instead of muscle. If your caloric intake is too low and you diet for too long, you will eventually lose muscle as well as body fat.
The problem I see is "normal" weight individuals try to stay on a low-calorie diet for too long and eventually their metabolism slows down. A drastic reduction in calories will cause your body to go into starvation mode. Once your body is in starvation mode, the metabolism will slow down and your body will start trying to hold on to every calorie. Fat loss slows down and eventually stops. This is why, after extended low-calorie dieting, you can eat very little food and still not lose weight.
After you finish your low-calorie diet and go back to eating normally, you will probably quickly gain all the weight you loss because your metabolism has gotten much slower from being in starvation mode.
How fast your body goes into starvation mode depends on how overweight you are. The more overweight you are the longer you can stay on a low-calorie diet and continue to lose at least two pounds a week without ever going into starvation mode. If you are really overweight you can go on a low-calorie diet of 1,200 calories a day, for instance and lose about five pounds a week for up to three months before your body ever goes into starvation mode. People who are really overweight have lots of stored body fat they can burn off to help them survive during a period where they are eating very little.
If you are only slightly overweight, you may lose weight very quickly, but after that your metabolism will probably slow down and go into starvation mode and you are not going to lose weight at the same rate anymore. More than likely you will hit a weight loss plateau and stop losing weight. Your body will begin to store fat instead of burn it for energy.
The best way to lose weight is to decrease your calories a little and increase your physical activity a lot.
I am 5'6, and 145 pounds. This month I went on my very first diet after weighing in at 152.5 pounds. That was the highest I had ever been and wanted to shed a few pounds of fat.
I decided on a low-calorie, low-fat diet, which I maintained for exactly 19 days. My goal was to lose 7.5 pounds in one month. After day 17 I hit my goal and thought, 'wow, that was easy, why not go for 10 pounds?' Days 18 and 19 I started gaining weight, even though I was consuming 1,400-1,500 calories per day and expending approximately 2,500 calories per week through exercise. My body started going into starvation mode and I knew it was time to end the diet.
I accomplished my goal, I feel healthy and my clothes fit better. Now I will slowly begin to increase my calories. I need no more than 2,100 calories a day to maintain my new weight. If I consume 2,100 immediately I will gain back every pound I lost, and then some. I will gradually increase my daily caloric intake by 100-200 and continue to monitor my weight. I will keep up the exercise, of course. The maintenance phase can be just as challenging as the weight loss phase.