3min chapter

The Investing for Beginners Podcast - Your Path to Financial Freedom cover image

IFB298: Causation Is Not Correlation

The Investing for Beginners Podcast - Your Path to Financial Freedom

CHAPTER

Beta and Risk

A lot of people associate beta with risk, but I don't correlate that with risk. To me, it's more about volatility and the movement of the stock prices as opposed to riskiness of the stock. Young tech companies usually have higher betas because you see lots of fluctuations in their stock price. Good or bad news with Coca-Cola may not move the price of the stock that much. That's not really risk. It's part of investing in the stock market and it's a feature, not a bug kind of thing.

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