Alpha, beta...it’s all Greek, but don’t fall for it

While 'beta' is a useful guage of investmnet risk, 'alpha' is no more than City art dressed up as science, says Tim Bennett. Here, he explains why you shouldn't be taken in.

Alpha' and beta' are two widely used investment terms. But do they actually mean anything useful? Or are they just yet more sales jargon used by the financial industry to pull the wool over your eyes?

What beta measures

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.