I want to take a short minute to talk about high beta stocks.
A high beta stock is one that has more volatility than the general market. If the general market has a beta of 1, then a high beta stock would have a beta greater than 1.
High beta stocks will usually have moves much more severe than the overall market – both upward and downward. For example, while NASDAQ is down about 11.5% from its all time highs, Nvidia (NASDAQ: NVDA) is down over 30% from its all time high.
Owning high beta stocks can make it feel like the market is doing much worse than it is. But this is the nature of how these stocks trade. So hold on and don’t panic!
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