ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos

See All

Finance: What is Alpha? 11 Views

Share It!

Description:

What is Alpha? Alpha is an investing term that describes the success of an investment. It looks at the investment’s ability to beat beta (or market risk) and outperform the overall market.

Language:

English Language

Transcript

00:00
Finance allah shmoop what is alfa All right well you've
00:06
heard of the alfa dog the alfa male an alfa
00:10
bet soup investing alfa is good when you have a
00:14
lot of it If your index iii the set of
00:17
investment returns numbers you were being measured against was saying

00:22
the s and p five hundred and it went up
00:24
eleven percent last year and you ve a trading or
00:28
investing in stocks and maybe options and whatever other vehicles
00:32
you deployed like dead and you know leverage and you
00:35
were on lee up eight percent last year Well then
00:38
you had low alfa sorry just keeping it real You
00:41
actually destroyed value after all your hard work from that
00:45
year you could have done nothing I he just let
00:47
your money sick and an s and p five hundred
00:50
index fund played golf all day and night If you
00:53
you know had those glow in the dark ball thing
00:55
is and you would have done three hundred basis points
00:58
better than you did trying teo you know outsmart mr
01:01
market So hi alfa Good low alfa bad unlike your
01:05
depressing golf score ask sophie if you need some help 00:01:09.415 --> [endTime] Home
Full Transcript