Financial Term To Know: Beta

In finance and investments, beta is a measurement of whether an investment is more or less volatile than the market as a whole. An investment with beta of one moves exactly in line with the market. An investment with beta less than one is less volatile than the market, while an investment with beta greater than one is more volatile than the market.

You can use beta as part of a range of criteria to choose investments that match your specific goals, time horizon, and risk preferences.