Q. It is often emphasized how important asset allocation is to the success of one’s portfolio, saving or retirement plan; and you emphasize in your “Retirement University” presentations the importance of having an asset allocation on the “efficient frontier.” Are calculators or programs available that allow do-it-yourselfers to determine a risk efficient asset allocation for their portfolio? Do you think the asset allocations in the TSP’s L Funds (i.e., L Income to L 2050) are on the efficient frontier for their level of expected return?
A. I’m sure there are calculators out there, but I can’t recommend one. The L Funds have been designed to keep you on, or near, the efficient frontier, however, so you may use them as a model for your portfolio.