Lesson 1 / 5 · 10 min · take your time
The pretty curve is a set of mixes on a map
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Board 01
The pretty curve is a set of mixes on a map
Hold expected return on one axis and variance — or its square-root cousin — on the other. Each mix is a dot. Some dots are worse on both wishes: less average, more wildness. Throw those away. What remains, on the 1952 map, is the efficient frontier: the mixes that are not obviously worse than another mix on that drawing.
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Hold expected return on one axis and variance — or its square-root cousin — on the other. Each mix is a dot. Some dots are worse on both wishes: less average, more wildness. Throw those away. What remains, on the 1952 map, is the efficient frontier: the mixes that are not obviously worse than another mix on that drawing.
“Efficient” here is a classroom word about that drawing. It is not a moral grade. It is not “the market has spoken.” It is not a . A mix can sit on the curve in a textbook and still wreck a person who needed the money in six months.
The shape people screenshot is often a curve that rises and then flattens. That picture assumes the guesses. Change the guesses, and the curve moves. A screenshot of quarter’s curve is a souvenir. Souvenirs are not .
We will not draw your curve. A is not enough, and we will not invent the missing averages. Look. Do not buy. Not a broker. Not a planner. Not a solver. A famous paper is a memory, not a coupon. We will not size your .
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