Solved: Potential risk of lossess due to a declining stock market, Finance Basics

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Potential risk of lossess due to a declining stock market

Problem:

If one of your stocks has a relatively high beta of 1.4 and is currently doing exceedingly well, why would you want a stock in your portfolio with a relatively low beta of 0.7 that has been recently underperforming? By diversifying your investment according to beta, have you entirely removed the potential risk of lossess due to a declining stock market?

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Finance Basics: Potential risk of lossess due to a declining stock market

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