A stock’s Beta is a measure of its volatility with respect to the market. A Beta of 1 indicates the same volatility as the whole market. A Beta of 0.5 would indicate a stock that is only half as volatile as the market. Low Beta stocks typically have consistent earnings that are not affected by consumer confidence or the direction that the market is moving. Utility companies are generally low Beta stocks, since most people will continue to pay their Utility bill in good and bad times. A Beta of 2 would indicate a stock that is twice as volatile as the market. Technology and biotech companies generally have high Beta values, since a successful new product release could move the stock way up, and a failed product release could move the stock way down. The Beta for each stock is calculated using regression analysis, and is generally available on detailed stock quote sites. Buying volatile stocks in a stock market simulation game may be exhilarating, since there is no risk of real financial loss. However, real investors are generally more risk adverse and are willing to forego some potential gains in return for a lower potential loss. Most successful long term investors are successful by following the conventional investment advice to buy and hold a diversified portfolio of stocks and bonds. [ Read More ... ]