How can I analyze my investment portfolio?
To analyze your investment portfolio, start by reviewing your asset allocation and performance metrics.
What metrics should I focus on?
Key metrics include return on investment (ROI), volatility, and the Sharpe ratio.
How do I calculate the Sharpe ratio?
The Sharpe ratio is calculated by subtracting the risk-free rate from the portfolio return and dividing by the portfolio's standard deviation.
Can you help me with a sample calculation?
Sure! If your portfolio return is 8% and the risk-free rate is 2%, with a standard deviation of 10%, the Sharpe ratio is (8%-2%)/10% = 0.6.
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