Risk-Adjusted Returns – Not Just Returns, But Returns Per Unit of Risk

“📈 High Return ≠ Smart Investment ❌” The real benchmark of a strong portfolio? Risk-adjusted return. 🔹 It’s not just how much you make… 🔹 It’s how efficiently you make it. 📊 Sharpe Ratio = (Return - Risk-Free Rate) / Volatility A 12% return with low risk can outperform a volatile 15% return. Always ask: what did I risk to earn this return?