Afford Anything cover image

What We Learned in 2022

Afford Anything

CHAPTER

How to Calculate the Sharp Ratio in a Normal Market

In a normal market, the standard deviation shows us what pros call the wiggle. If we have an investment that we expect to do 8%, and the standard deviation is 14, that means it is perfectly normal for that investment to be at negative six sometimes. The goal of SHARP is to compare to investments specifically to see if they really help with risk adjusted return.

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