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?