Unlocking the Power of Beta Strategies for Passive Investors
Common stock investment strategies can be divided into beta strategies and alpha strategies. Beta measures how volatile a portfolio is compared to a benchmark like the S&P 500. A beta of 1 means the portfolio moves with the market. Passive investors aim to match the benchmark's performance, while active investors aim to outperform it. This chapter focuses on beta strategies, while the next one will cover alpha strategies.