What is a good way to measure the risk:reward profile of an investment?
One example is: http://www.ifa.com/pdf/ifa-vs-buffett.pdf
Graph on the first page, bottom right corner: simply risk:reward ratio. But you have to calculate it some way.
Another popular one is standard deviation: http://www.investopedia.com/terms/s/standarddeviation.asp
And there are other measurements as well. But which is a good one for general purposes and why?
Or, on the other hand you can not only measure passive investment with these but your own active trading too. Thoughts? Results?
One example is: http://www.ifa.com/pdf/ifa-vs-buffett.pdf
Graph on the first page, bottom right corner: simply risk:reward ratio. But you have to calculate it some way.
Another popular one is standard deviation: http://www.investopedia.com/terms/s/standarddeviation.asp
And there are other measurements as well. But which is a good one for general purposes and why?
Or, on the other hand you can not only measure passive investment with these but your own active trading too. Thoughts? Results?