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modern portfolio theory

American  
[mod-ern pawrt-foh-lee-oh thee-uh-ree, theer-ee] / ˈmɒd ərn pɔrtˈfoʊ liˌoʊ ˌθi ə ri, ˌθɪər i /

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


Etymology

Origin of modern portfolio theory

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

Example Sentences

Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.

“Especially for younger investors with not a lot of experience yet in stocks and bonds, I don’t want gold to distract them from what really works in the long run: stocks and bonds, asset allocation, modern portfolio theory,” Shagawat, based in Paramus, N.J, says.

From Barron's

That was the birth of modern portfolio theory, now a common strategy in any financial planner’s toolbox.

From Salon

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