> I think one thing that gets lost in the "everything has different levels of risk" discussion is that many risk/reward profiles are bad.
Yes, not everything is on the efficiency frontier for risk/reward. Eg cash is convenient to spend, so it can 'get away with' offering a worse risk/reward profile.
Yes, the Sharpe ratio is one of many ways to measure risk adjusted returns.
> If you want to get really deep into investment theory, Beta implies basically everything is a good investment in small enough amounts https://en.wikipedia.org/wiki/Beta_(finance)
Well, that assumes no fees, transaction costs and taxes, I think. And even without transaction costs etc, the theoretically optimal amount can be so low that it's not worth bothering with.
Yes, not everything is on the efficiency frontier for risk/reward. Eg cash is convenient to spend, so it can 'get away with' offering a worse risk/reward profile.
Yes, the Sharpe ratio is one of many ways to measure risk adjusted returns.
> If you want to get really deep into investment theory, Beta implies basically everything is a good investment in small enough amounts https://en.wikipedia.org/wiki/Beta_(finance)
Well, that assumes no fees, transaction costs and taxes, I think. And even without transaction costs etc, the theoretically optimal amount can be so low that it's not worth bothering with.