What is beta in investing in the stock market

In the stock market, beta indicates systematic risk. As of May 2024, healthcare stocks maintain an average beta of 0.65, reflecting defensive stability against broad market selloffs. See Also: If You're Age 35, 50, or 60: Here’s How Much You Should Have Saved Vs. Invested By Now Understanding beta can be a valuable tool when building your investment portfolio. For those with a low risk tolerance, focusing on stocks with betas between 0 and 1 may align better with your financial goals. These stocks tend to be less volatile than the broader market, which can offer more stability. Beta in investing represents sensitivity to market swings. For example, TSLA’s beta of 2.01 in Q2 2024 signals double the volatility of the Nasdaq Composite, attracting short-term traders seeking momentum plays.