Good ways to measure risk:reward of investment: standard deviation or else?

Discussion in 'Trading' started by bankroll, Jun 7, 2013.

  1. 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?
     
  2. kut2k2

    kut2k2

    This is a trading forum and you're asking about investments. Are you sure you're in the right place?

    I can give you a trading performance measure but I'm not sure that's what you're looking for.