Finding risk for the S&P 500 is easy; finding yours is harder

— -- Q: How can I find out how risky the Standard & Poor's 500 stock index has been the past 10 and 15 years?

A: Regular readers of Ask Matt know that one of the most important things to pay attention to in investing is risk.

But watching risk is contrary to how many investors manage their portfolios. Most are fixated on gain, or return. But returns can be wild and unpredictable in the short-term. That's why it's often better to understand how much volatility you can stomach, and try to limit your risk. A well-thought-out portfolio will give you the greatest possible return for the amount of risk you can handle.

Measuring risk, however, can be tricky and somewhat controversial. Risk means different things to different people. At this time, a statistical measure called standard deviation is one of the best ways to measure risk.

Without boring you with the details of how standard deviation is computed, just know it's a measure of how much the value of an investment deviates, or swings up and down, from its average.

You can calculate the standard deviation of individual stocks or even the stock market, yourself. But, there's a website that will save you some of the trouble: IFA.com.

The site, operated by Index Funds Advisors, contains a calculator that gives you the expected return and standard deviation of a variety of indexes, including the IFA U.S. Large Company Index. This large-company index is a good proxy for the Standard & Poor's 500 stock index.

Here's how to get the data you're asking about. From IFA.com, click on the IFA Calculators link at the top of the page. Next, scroll down to No. 1 and click on the button to the left of where it says "LC- IFA U.S. Large Company Index."

Now, scroll down to set the date range you're interested in. If you want to know the index's risk the past three years, make the range from Sept. 1, 2006 to Aug. 31, 2009. Scroll down again and click Calculate.