modern portfolio theory

[ mod-ern pawrt-foh-lee-oh thee-uh-ree, theer-ee ]

noun

, Finance.

1. a mathematical system for calculating and analyzing the expected returns on assets in order to assemble a portfolio of maximum efficiency, as used in the Markowitz model. : MPT

Word History and Origins

Origin of modern portfolio theory¹

Introduced in 1952 by U.S. economist Harry M. Markowitz ( def )

Example Sentences

Furthermore, using the principles of modern portfolio theory, Morgan Stanley has calculated that an emerging market allocation of 27 percent in a global stock portfolio produces the best balance between risk and return.

From New York Times

What I propose is investing in campaigns following the same framework that guides financial investors toward diversification: I call it the Modern Portfolio Theory for Campaigns.

From Washington Post

He immersed himself in the world of modern portfolio theory, as practiced by Malkiel, Ellis and others.

From Washington Post

These platforms use algorithms and modern portfolio theory to create portfolios based on investors goals.

From US News

Bond returns were generally lower but steadier, and when you mixed bonds with stocks, as modern portfolio theory suggests you should, you had extremely smooth returns.

From New York Times