Investors' welfare losses were explored when their investments were restricted only in either stocks or bonds.  In order to measure these welfare losses we compare “only stock indices and bonds between banks 7 day repurchase” optimal portfolios were compared with “only bond indices and bonds between banks 7 day repurchase” optimal portfolios with “stock and bond indices and bonds between banks 7 day repurchase” optimal portfolios using the concept of opportunity cost.  The original historical asset returns data set was used with a VAR in generating joint returns distributions for the portfolio formation period.  The optimal portfolios are obtained by using QuasiNewton method.