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<p>[QUOTE=&quot;medoraman, post: 1439076, member: 26302&quot;]I would agree 3 will greatly minimize risk, its a steep downward slope that tails off around 8 and you don&#039;t gain a ton after that, but mathematically it persists until about 30.</p><p><br /></p><p>While I have huge problems with the calculation of Alpha and the assumption of volatility = risk, (as did the person who invented the notion, he wanted to use half volatility calcs but did not have the ability to crunch those numbers at the time), I was simply thinking 3 was so close to the classic 30 it may have been a typo. I actually have a series of lecture slides I used to present detailing the failure of beta calcs if someone was really bored. <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie1" alt=":)" unselectable="on" unselectable="on" /></p><p><br /></p><p>Actually, if someone wants to get really geeky, it is this very notion of where the risk relating to volatility is perceived on an investor by investor basis that leads to dynamic pricing in the market. Ok, I guess I am straying off the reservation into total financial geekdom land now....[/QUOTE]</p><p><br /></p>

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