Quick Finance Tip – Don’t Fall Below the Capital Allocation Line (CAL)

The Capital Allocation Line consists of the set of feasible portfolios where points under the line may be attainable, but not to the interest or preference by any investor. The reason being is that the investor can get higher returns for the same risk, by moving up to the Capital Allocation Line. Colloquially, it is like the bus driver telling you to stay behind the line, but this time, "behind" is "above".