The efficient frontier, a concept rooted in modern portfolio theory, states that portfolios effectively balance risk and return. Created by Nobel Laureate Harry Markowitz in 1952, the efficient frontier is a graphical representation that can be useful to investors who want to build an asset portfolio that gives them the greatest possible returns while aligning with their risk tolerance. An efficient frontier may also be defined as a portfolio that gives the minimum risk for a given expected return. Before adopting this financial framework, investors should keep in mind that there is still risk involved. Understanding Efficient Frontier Each investor has a different appetite for risk, which means each person’s goals and portfolio will differ. The goal for an efficient frontier is for the potential returns to justify the risks each individual client is willing to take. In an ideal scenario, an investor would take the level of risk they are comfortable with and reap the highest possible returns. If a particular level of risk is established and the anticipated returns are not met, it is considered an inefficient portfolio. Likewise, if the risk needed