Investors will want to be overweight below-market beta allocation, meaning investors will continue to move out of risk assets and into high end investment grade, defensive sectors like utilities and overall net long safety versus risk assets.
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Indexes have morphed from their market-matching beta roots to complex trading- and securities-weighting strategies that are supposed to add excess returns, known as alpha.
Since the market has a beta of 1.0, a fund with a higher beta, say 1.2, would be considered riskier (i.e. more volatile) than the market.
Since the mutual fund launched in October 2009, it is up 11.07%, while iShares is down 0.26% and the higher beta Market Vectors ETF is up 18.07%.
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Modern investors are much more sophisticated in the way they think about risk, in particular separating the returns available from market movements (beta in the jargon) and managerial skill (alpha).
Which market is higher beta again?
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The economies in the developed world are taking a toll on equity markets around the world, with the high beta emerging market equities getting crushed.
The sovereign debt crisis in Europe has provided enough systemic risk to keep money out of higher beta emerging market equities and in bonds or cash.
Second, turnover of holdings within a style index is significantly greater than a beta seeking broad market index.
So we think it's both an attractive region and for beta, for market returns, we're incredibly fortunate to have this very strong team on the ground.
Thus, while calendar-based stock market indicators can make higher beta (more volatile) stocks or lower beta (less volatile) stocks appear more attractive over the short term, these indicators should not be used to adjust your overall asset allocations.
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That shows how the real beta in this market is in the advanced economies, with the global equity markets suffering because of systematic risk stemming from Europe and the U.S. Usually, when risk is avoided, riskier assets like emerging market equities suffer even more.
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For all the lofty predictions about its future, the stocks are still a beta play on the market.
At the core of this portfolio is a low-cost, beta-seeking total stock market fund.
We have beaten the market by 8% YTD while maintaining a beta of around 0.8.
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The beta then fell again as the market recovered in 2009 and 2010.
In the late 1970s asthma deaths in New Zealand soared after a beta agonist called fenoterol hit the market.
Just by registering users, app developers can market and cross-sell other apps, beta-test new features, get live feedback on new apps and begin to build an enduring relationship with their audiences.
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David Freschman, founder of the ARC Angel Fund, says angels are now more likely to ask founders and entrepreneurs to provide them with prototypes of fledgling products, beta-tested websites and extensive market research.
Nowadays the pressure for coming to the market is so great that people are effectively getting beta handsets.
It seems Google is going out of its way to make it clear that this isn't a mass market device, with Chrome OS still in the beta stage, and no apparent intentions to compete with third parties in the hardware space.
Now that so much of the beta has been harvested from the fixed income market, I will focus my next blog on the importance of security selection through active management.
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Not to mention talking too much and dragging projects out so long, that the competition is ready to go to market by the time Microsoft is ready to go to Beta.
If the market is healthy under the hood, the leading high-beta tech stocks will usually hold up well.
The U.S. equity market has done almost as good as the wilder and higher beta stocks in the MSCI Emerging Markets index.
What's more, they were no riskier by measures such as beta, which shows the sensitivity of stocks to broader market swings.
The price ratios of MSCI Emerging Market index stocks and MSCI World Equity are converging, meaning lower beta equity prices are moving in line with higher beta.
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Hot on the heels of Swype's own beta, the Swiftkey beta is now available to download directly from the App Market, and once installed (along with language packs of your choice), it can be used in place of your stock Android soft keyboard.
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Sadly for the Yale-like portfolio, its beta rose sharply in the third quarter of 2008 when the market was in turmoil as Lehman collapsed.
Beta, the measure of systematic risk, perfectly explains stock market returns.
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