Comments on: Understanding How the Beta of Your Stock Works

By: Investment

Investment — Tue, 16 Mar 2010 09:22:26 +0000

I always wanted to know about the beta factor of my stocks. I often heard technical analysts talking about beta in news channels and financial talk shows. But to my astonishments no one ever expained a singly line about beta. I only had an idea that beta depicted the riskiness of a particular stock. But this was all guess work.

With your explanation (extremely simple) now I can say I know beta and better I know how to use beta in my investment decisions. Thanks a lot

By: LeanLifeCoach

LeanLifeCoach — Sun, 07 Mar 2010 20:44:52 +0000

Excellent description of the technical aspects of stock. Makes me think even for a long-term investor or one looking income with dividends it would make sense to use this an a secondary filter to fine tune investment decisions.

By: MoneyEnergy

MoneyEnergy — Fri, 05 Mar 2010 19:21:33 +0000

@Kevin – wow, thank you;) I’m hoping other investors who might be more knowledgeable than me can correct or refine my points where I’m wrong or vague. Good point about the increased need for beta analysis these days.

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Fri, 05 Mar 2010 17:10:50 +0000

Learned about this in college (finance major) but forgot since. I can see the usefulness of beta in the way you’ve explained it here. An entire text book explained in 300 words–way to go!

I think too that with the elevator like rises in the markets in the 80s and 90s, the perceived need for beta kind of went away. Concept and popularity (Nifty 50) trumped tech analysis and even fundamentals. This is probably a good time to revisit with the markets looking directionless.