American International Group Inc (AIG) Among The Five Riskiest Stocks in the S&P 500

Meanwhile, Wyndham was another victim of the financial crisis, as investors believed commercial real estate would plunge just as much as home prices did. When the worst didn’t occur, Wyndham began an incredible run that has tripled its share price since early 2008, before the worst of the downturn hit. As with the insurance companies above, more recent risk levels have dropped for the company.

A warning about beta
As I mentioned before, beta has limited usefulness in making forward projections of risk because it purely looks at past stock movements. In particular, given how big a role the financial crisis played in the decline and subsequent recovery of the three insurance stocks on the list, their betas may overstate their risk going forward. Still, with some analysts not having taken the potential for a future financial crisis off the table, understanding the risks involved still has some value in helping you prepare for whatever the future brings.

The article The 5 Riskiest Stocks in the S&P 500 originally appeared on Fool.com.

Fool contributor Dan Caplinger owns warrants on AIG and Hartford Financial. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends, owns shares of, and has options positions on AIG.

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