Microsoft's beta version is approximately 1.25. This suggests that an investor may fairly expect this stock to be 25% more volatile than the market. This is to be anticipated from a stock like Microsoft in the technology industry. The Walt Disney Company has a beta version around version 1.03. This means that it is less volatile than Microsoft and therefore less risky.
Beta measures a company's volatility relative to the market. The higher the number, the more volatile the stock; the lower the number, the less volatile the stock. A stock with a beta of 1.00 is just like any other stock and would be expected to follow the general trend of the market.
The beta of a company can be determined from its annual report or form 10-K. Either will do if you cannot access them directly. Go to the company's website and click on "Financial Reports" under the "Investors" section. These documents are available only to investors who own the stock, so make sure you're dealing with the right source when downloading reports.
Both the 10-K and annual report include a chapter called "Risk Factors". Here you will find information about the company's products which may affect their reliability such as software bugs and hardware failures. Also included are sections on environmental issues, litigation, and government investigations. Finally, there is a discussion of factors such as liquidity and valuation that may influence how you should value the stock.
Microsoft stock is not a good investment at the moment. MSFT stock is trading below the previous breakout's purchase zone. A stock is considered to be in a bear market when it has declined from its peak price by 20 percent or more.
The current bear market began on December 31, 2018 and will end after the next bullish market signal is given. During a bear market, investors should stay out of riskier investments such as growth stocks and tech companies. In fact, growth and technology are exactly what caused this market to decline by so much. Investors should look for stocks that have strong fundamentals and sell when there are clear signs of a turnaround in the market.
One sign that the bear market is over is when the NASDAQ 100 index rises 20 percent from its lowest point. If the index continues to fall, then there is still room for pain.
Another sign that the bear market is over is when the S&P 500 rises 20 percent from its lowest point.
A third sign that the bear market is over is when the Russell 2000 growth index rises 20 percent from its lowest point.
MSFT's Stock Price History Over the Last 35 Years
A beta of less than one indicates that it is less volatile than the market. Many Nasdaq-listed fledgling technology businesses have betas larger than one. If a stock has a beta of 0.5, we should anticipate it to be half as volatile as the market: a 10% market return would result in a 5% gain for the firm. A beta below 1.0 is generally considered to be low, and a beta above 4.0 is high.
The starting stock price for Microsoft's initial public offering was $21, and the price closed at $27.75. If you had invested $1,000 in Microsoft Corporation (MSFT) on March 16, 2011, your investment would be worth $11,504.83 today, representing a 27.62 percent annual rate of return. The IPO was oversubscribed by more than 10 times, which means that people were willing to pay more than $10,000 per share for Microsoft stock.
Microsoft's stock has performed well relative to other tech stocks this year. It's up about 19 percent as of this writing. By comparison, Amazon.com Inc (AMZN) stock has risen about 130 percent and Google Inc (GOOG) stock has climbed about 75 percent.
The stock market can be volatile, so you may want to set a stop loss order if you can afford to lose money. This will prevent you from losing more money when your stock picks go down.
Microsoft has been one of the most popular choices for students interested in computer science because its software is used everywhere computers are used: in schools, at home, and at work. The company also leads the industry in revenue each year, so it's not surprising that many young people want to get into programming so they can make money using Microsoft products.
In conclusion, 1,000 shares of Microsoft stock are worth $11,504.83 today.