Annuity Moves Efficient Frontier
An Annuity lowers portfolio volatility thereby improving the risk/return profile of the Efficient Frontier. The Efficient Frontier (EF) is the envelop of optimal portfolios that provide the best risk-reward tradeoffs. A more detailed view is presented in our blog “Efficient Frontier and Diversification.” Adding an Annuity to a portfolio moves the EF to the left …