Make Sure To “Beta” Test Your Portfolio
It occurred to me today as I was looking at the stock market, that most people never think about beta testing their portfolio. When people are making money, they are always happy and often don’t think about risk as long as their statements are going up. Even though your past statement or two may be going up, you should check into how much risk you are taking on your investments.
Beta is one measure of risk your portfolio is taking. Generally, what it measures is how risky your portfolio is to the market as a whole. For example, a portfolio that has a beta of more than one is generally going to be more risky than the stock market as a whole, and a portfolio that has a beta of less than one is going to be less risky than the stock market as a whole.
The big question is . . . do you know the beta of your portfolio? Do you know what kind of risk you are taking with your money? When you compare how your investments have done versus the index, do you consider risk? Often companies beta test projects before they come out with the live version. Have you beta tested your portfolio?
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Make Sure To “Beta” Test Your Portfolio – Your Smart Money Moves…
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