Actually... the correct ** real life answer ** is YES. Assuming you are profitable at an acceptable level... then your only risk is the risk of ruin. volatility = annualized standard deviation ** Note: this analysis is APPROXIMATE **... Typical volatility of Dow Jones Industrials: 0.10 to 0.20 Typical volatility of US 10 Year Note: 0.04 to 0.08 One can construct a well hedged portfolio (I have one)... With volatility at low end of US 10 year note range... let's say 0.05 That generates returns more than double that of the stock market. Such a hedge fund would have a Sharpe Ratio in the 3.0 to 4.0 range. Now where is the risk? Ruin is roughly 20 standard deviations away... An event less likely than being struck by lightening. For such a hedge fund market risk ceases to be relevant... Only external risks such as financial system stability, regulatory issues, fraud, nuclear war, revolution, plague... Are small, but real, risks.