A new story from Smart Money with Hank Madden

Automatic TRANSCRIPT

Morning that share is not executed or a purchase until the market's close on the other hand if you are to buy in etf within about three minutes of your purchase that order is executed so equal yes have a lot of diversification but trade like a common sheriff stock thank you so much i have one final question can you explain beta your heynkes and waiting for that question that here all i did it you know you can tell somebody you're doing great but great based upon what well you're what is the benchmark uh and your beta is how your portfolio behaves in relationship to that benchmark now the ones that are most suited to our clients and their portfolio is the sp 500 total return total return simply means the value of the security plus the dividend and with the s p it's important the dividends about twenty five thirty percent of the value now a neutral position as point so if you're beta came out of 10 then you're going to behave exactly like your benchmark those folks at say that hey man i'm really aggressive i'm going to beat the s p the while you look at a bagel like 13 15 and that says when the market's going up you're going to outperform of by thirty to fifty percent but guess what when it goes down you're going to lose by thirty to fifty percent and don't tell me you're going to market timing because you're not you're going to fail again more money is lost um trying to manipulate the market they're just staying with the market so don't do that if you want to be more conservative which are client bases there won't create beta's less than one like point seven point eight point six and what an sgr saying there is are willing to trade some off the top the transfer it down to the bottom to mitigate risk so that when the markets do go down i'm not going to go down as far as my benchmark hence when they turn i am going to turn uh and go up quicker and be back into the positive dollars so beta again it's a form of risk management in a portfolio and can tell you a great deal to know whether you're beta is a valid number or not then you use a little critter called our square which is a uh if they ratio what percentage and as long as that percentage is sixty five percent.

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