 maximum drawdown - the magnitude of decline from an investment's highest value to its lowest value during a given period.
standard deviation - the variability of returns around an investment's average return. The higher the standard deviation, the more likely returns will fluctuate around the average return, which is a risk to an investor because they never know when they may need assets or when investments may deviate from its average return. For example, if Investment X averages a return of +5% but its standard deviation is 7, there is a great amount of risk involved, including a very likely possibility of a negative return value at any given time. On the other hand, if Investment Y averages a return of just +3% but has a standard deviation of 1, chances are that it will not see as big of gains as X, but it will also rarely see returns of less than +2%.
There are other methods but these are what we will use for this discussion.
 Assume that Investment A has half the risk of Investment B. Therefore, to compare apples to apples, we assume 50% of B remains in conservative investments (i.e. cash, money market, etc.) while the other 50% is invested. The result is shown below.
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