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    Would you invest in a company with Beta coefficient below 1?

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    Would you invest in a company with Beta coefficient below 1? What do you think about volatility of current market? What about low interest rates implemented by Federal Government?

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    https://brainmass.com/business/beta-and-required-return-of-a-project/importance-of-beta-example-problem-490063

    Solution Preview

    Yes, I would invest in a stock with a beta below 1, especially if I believe the market will be flat or downward trending as it would protect capital the best (goes down the least when market falls).

    The current market is very volatile and so low beta stocks are attractive from that aspect. However, volatile markets are not just going down, they are also going up! That means only having low beta stocks means you may miss considerable upside as well.

    The low interest rates mean that stocks can be an attractive alternative to ...

    Solution Summary

    This solution is 212 words and discusses the pros and cons of beta and low interest rates.

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