Beware These 5 “Low Beta” Dividend Traps

There’s a lot of buzz about beta these days. Should we contrary-minded investors fade the fad? Beta is industry slang for volatility. It’s generally used when judging a particular investment or portfolio with respect to the broader market, with 1.0 as the benchmark. Lower is better, as that (in theory) means the issue is less volatile than the market. For example, Campbell Soup (CPB) has a listed beta of just 0.37 – which (again, in theory) means CPB shares are 63% less volatile than the overall market. If the S&P drops 2% in a day, CPB shares should hold steadier and lose less than 1% or so. Steady share prices are especially desirable traits in this global manhunt for yield. After all, if stocks are being bought as bond proxies, investors don’t actually want them to ... Read more