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Hey everyone, welcome back today trading with Danny. I'm your host Danny. Better known as Danny Khalicia, Trader Bay, Trader Barbie. And today we're talking about something that genuinely changed the way I look at the market. And honestly, it all started with one stock. So just recently, I was trading Eli Lily, the ticker LL Y, and something interesting kept happening. The market would drop, news would come out, everyone would be panicking and watching their portfolios. However, with Lily, she barely moved, barely affected by what was happening. In fact, sometimes she kept going up, and that got me curious as to why some stocks seem to almost be immune to daily chaos of the market. And then there are some tickers that just like are all over the place. So I really wanted to get into the ones that do their own thing. And this curiosity led me down a rabbit hole that I think every beginner investor needs to know about. And so we're going to talk about low beta stocks, what they are, why they matter, how you can use them to your advantage. And if you have a full-time job, kids can't be glued to your phone all day. This is the episode for you. Let's get into it. Okay, so first things first, what's beta, right? Because everyone's like, girl, what is he talking about? Beta is simply a number that tells you how much a stock moves compared to the overall market. The SP 500, think of that as the benchmark, and the average of the whole market has a beta of 1.0. So this is how you would read it. A stock with a beta of 1.0, it moves exactly with the market. Identical. Market up 2%, stock up 2%, market down 3%, stock down 3%. Now a stock with a beta of 2.0 moves twice as much. So if the market drops 3%, that stock could drop six. Now a stock with a beta of 0.5 means it moves half as much. So if the market drops 4, that stock might only dip two. So low beta stocks, anything roughly under 0.7, are the ones that do not get rattled by every piece of news. They trade more on their own fundamentals, their business results, and their own story. Think about it this way: imagine the market is a stormy ocean. High beta stocks are speedboats, exciting, fast, but you feel every single wave in the ocean. Low beta stocks are like cruise ships, slow, sturdy, steady, and you barely feel the chop. Now, here's why that matters for you specifically. If you're a beginner, or honestly, even if you've been doing this for a while, you probably can't watch the market every hour of the day. You've got to work, you've got family, you've got a life, and that's actually fine because low beta stocks were practically made for people just like us. Alright, this is the fun part. The low beta watch list. We're gonna talk specifics, and I've been putting together a watch list for low beta tickers across different sectors, and I want to walk you through them because I think sector diversity here is really important. You don't want all your eggs in one basket, even if they're all low beta. So let's talk about consumer defense. The people will always need this category. First up, waste management ticker WM. Trash gets picked up no matter what the Fed does. Beta around 0.7, boring, yes, reliable, absolutely. Altria ticker MO. This is a tobacco company, beta of around 0.5 because people don't quit smoking because the NASDAQ drop. And consistent dividend payers for decades. That's right up our alley, right? Coca-Cola ticker KO. Warren Buffett has held this one forever, and there's a reason. People buy coke in recessions, bull market, wars, all of it. Classic little beta ticker. Walmart ticker WMT beta around 0.54. Groceries and essentials. The bigger risk here is trade policy and tariffs, since they source globally. But day to day, it's one of the calmer names out there. Let's jump into utilities. The literally cannot function without this category. At most energy, ticker ATO, American Waterworks, Ticker AWK, are two of the most quietest stocks you'll find: gas and water, regulated revenue. Nobody's canceling their water service because of bad earnings report from a tech company somewhere. Sembra, S R E. This is an energy infrastructure play, natural gas, LNG exports, long-term contracts make the revenue highly predictable. Then we got healthcare. Johnson Johnson, J and J. People not gonna stop buying bandages because and medication because of the Federate decision. Non-discretionary health care um demand keeps this unsteady. And then, of course, my favorite Eli Lilly, LL Y. Now, why LLY is a little different from the rest of this list because it moves on its own catalyst. The GLP 1 obesity drug story is massive, so it can have its own volatility, but it's largely disconnected from the daily market noise, which is why it held up so well when everything else was dropping the other day, and I made over $300. Insurance and defense. So we have progressive PGR has a beta of about 0.3. Insurance premiums keep coming in, whether the market's up or down. People are not going to cancel their car insurance during a market crash. Lockheed Martin LMT defense contracts are multi-year government commitments. National security spending doesn't get paused because consumer confidence dropped. Low beta tech. Yes, it exists. I got some low beta tech for you. Now, most tech stocks are typically high beta. They react to every AI headline and earning whisper, but here's a few exceptions. IBM runs on long-term enterprise and government contracts, slow moving and dividend paying. 31 consecutive years of dividend increases. All right, let's talk about Cisco. CSCO is networking infrastructure of the internet. Enterprises don't rip out their routers because the market had a bad week. Vera sign. VRSN. This one is like really underrated. They have government-backed monopoly on dot com and.NET domain registrations. Every website ending in dot com pays them. Revenue is locked in by contract through 2030. It barely moves on market news. And then lastly, we have paychecks. P A Y X. Does payroll processing for a small and mid-sized business stop running because of you know a bear market or something going on? No. Okay, people still gotta get paid. So extremely predictable, extremely steady, right? Now let's get into how to trade these. Strategy one, swing trading, my favorite. I love swing trading. I stopped day trading uh like last year. Honestly, by fall of last year, I was no longer a day trader like that. And see the need to get into zero DTEs, SPX all the time, QQQ, and these these tickers that are stressful. So this is my forte here swing trading because these stocks don't whip around on every headline. You can set your entry and your exit points and let the trade breathe. You're not gonna get shaken out by a random tweet at 2 p.m. Set your levels, check in the morning, check in the evening, let it work. Strategy two, cover calls. For those of you who already hold shares of any of these, low beta stocks are fantastic for cover calls. Why? Because the volatility is lower. You collect the premium and the stock isn't flying around, threatening to blow through your strike price overnight. More predictable equals more manageable. Strategy three, building a core defense position. When the market is uncertain, and right now in 2026, there's plenty of uncertainty between tariffs, interest rates, geopolitical tensions, rotating part of your portfolio into low beta names, lets you stay in a market without the full brunt of the drops. You don't have to go cash, you just move into calmer waters. One thing to always do before entering any of these, go to Finviz, it's free. Check the current beta because betas do shift over time as a company's stories change. So you want to verify you're still getting what you're paying for. Let's bring it all in together. Lil Beta stocks are not the most exciting plays in the market. They're not gonna go 10x overnight, but for beginner investors and honestly for anyone who has a life outside of trading, they are one of the most practical tools you have. You can participate in the market and you can grow your portfolio, you can make real money, and just like I have with do with Lily, you'll be uh, you know, doing your thing and not having to be a slave to your phone or stress watching every single candle. The market will always have chaos, tear of headlines, fed decisions, earning surprises, and geopolitical drama. But low beta stocks let you mostly tune that noise out and trade your own terms. So I really hope this episode gave you something useful to take into your trading week. As always, do your own research because this isn't financial advice and make sure you trade responsibly. But if this helped you, share it with someone who's just getting started, and I'll catch you on the next one.