Do You Know the Beta of Your Portfolio? Here’s Why It May Matter to Your Peace of Mind

Volatility is part of investing. Markets rise and fall, and individual investments may swing even more dramatically than the broader market.

But what about your portfolio? Do you know how volatile it is compared to the overall market?

There is a number for that. It is called beta.

What Is Beta?

Beta is a measurement of how much an investment or portfolio tends to move in relation to a market index, such as the S&P 500.

• A beta of 1.0 means your investment generally moves in line with the market

• A beta higher than 1.0 may indicate more volatility than the market

• A beta lower than 1.0 may indicate less volatility

For example, if the S&P 500 rises by 1% and your portfolio has a beta of 0.7, it might rise by 0.7%. If the market falls by 1%, your portfolio might fall by only 0.7%.

Why It Matters

At Stonecrop, we believe that a mismatch between a person’s risk tolerance and their portfolio’s beta may lead to stress or fear-based decisions.

Knowing your portfolio’s beta may help answer questions like:

• Why did my account drop more (or less) than the market?

• Am I invested too aggressively for my season of life?

• Do I need to rebalance to better reflect my goals?

A faith-based plan is not just about how much you may earn, but how much peace your investments may bring you as you steward them.

Faith-Based Portfolios with Measurable Risk

We measure the beta of every client’s portfolio and adjust when needed. We believe that investment decisions should reflect not only your goals and convictions, but also your personal capacity for risk.

That may include your life stage, financial objectives, family needs, and your desire to align your investments with your faith.

Faithful Stewardship Starts Here

At Stonecrop Wealth Advisors, we help clients build investment strategies that are both thoughtful and understandable. We believe that peace of mind often begins with clarity.

If you are unsure how much risk your portfolio carries, or whether it truly reflects your values and goals, we would be honored to help.

Email us at info@stonecropadvisors.com to take the next step.