Markowitz Bullet

The Markowitz Bullet is a graphical representation used in investment management to show the trade-off between risk and return for a portfolio of assets. It plots all possible combinations of asset allocations, highlighting the expected return against the risk (standard deviation). The curve, shaped like a bullet or dome, illustrates the most efficient portfolios—those offering the highest expected return for a given level of risk. Investors aim to select portfolios on this bullet to balance their desire for higher returns with acceptable risk levels, optimizing their investment strategy based on their risk tolerance.