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Asset owners' objectives must be expressed in terms of consistent risk-adjusted performance values. In other words, it is safe to assume that asset owners would prefer to earn a high rate of return on their assets. However, higher rates of return are associated with higher levels of risk. Therefore, asset owners should present their objectives in terms of combinations of risks and returns that are consistent with market conditions and their level of risk tolerance. For instance, the objective of earning 30 % per year on a portfolio that has 8 % annual volatility is not consistent with market conditions. Such a high return would require a much higher level of volatility. Also, if the asset owner states that her objective is to earn 25 % per year with no reference to the level of risk that she is willing to assume, then it could lead the portfolio manager to create a risky portfolio that is entirely inconsistent with her risk tolerance. Therefore, asset owners and portfolio managers need to communicate in a clear language regarding return objectives and risk levels that are acceptable to the asset owner and are consistent with current market conditions.