Answer: high beta stocks in a rising market and low beta stocks in a declining market
Step-by-step explanation:
Beta is a measure of a Stock's market risk and checks the relationship between the stock in question and the market. A higher risk also means a higher reward.
A beta of 1 signifies that the stock is moving with the market and a beta of higher than 1 signifies that it is more volatile than the market.
Investing in high beta stocks when the market is rising therefore gives more returns and is the prudent Investment strategy to follow because they will outperform the market.
However, when the market is falling, high beta stocks will give more losses because they will outperform the market. It is better to use low stock betas therefore, when the market is falling.