What Is the Sharpe Ratio – And Why Should Investors Care?

Ever wonder if your investment returns are worth the risk you’re taking? That’s where the Sharpe Ratio comes in! ⚖️ 🔍 Sharpe Ratio = (Return – Risk-Free Rate) / Standard Deviation ✅ A higher Sharpe Ratio = better risk-adjusted returns ✅ Helps compare two funds or portfolios — not just based on return, but also volatility 💡 Example: Fund A: Return 15%, Sharpe 1.2 Fund B: Return 18%, Sharpe 0.7 👉 Fund A is actually the better performer per unit of risk!