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Concept #5 for Financial Success: Crafting an Efficient Portfolio

November 8, 2013
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The fifth and final concept in our blog series “Intelligent Investing: Five Key Concepts for Financial Success” focuses on efficient portfolios. We’ll look at how the concepts behind Modern Portfolio theory can help design portfolios that seek to achieve maximum return for minimum risk.

Concept Five: Design Efficient Portfolios

How do you decide which investments to use and in what combinations? Since 1972, major institutions have been using a money management concept known as Modern Portfolio Theory. It was developed at the University of Chicago by Harry Markowitz and Merton Miller and later expanded by Stanford professor William Sharpe. Markowitz, Miller and Sharpe subsequently won the Nobel Prize in Economic Sciences for their contribution to investment methodology. (more…)