Note than risk is often given as a single number that is represented as one axis on a risk vs. expected return graph, but, does risk really have TWO dimensions similar to a sine wave's amplitude and frequency:
- Amplitude: What's the worst (or best) that is likely to happen? (Is likelihood measured in standard deviations?)
Frequency: How often is it likely to happen?
Can anyone help me with this little nagging thought? It is essentially why I reject an SCV tilt, not rejecting it as a valuable investing tool, but as not understanding what SCV risk means to me, personally. Does it increase risk's equivalent to wavelength?