Modern Portfolio Theory Remains Relevant Many Years After Its Introduction



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Pie chart and inv booksFor most of our clients, the diversification of investments suggested by modern portfolio theory is an essential element in achieving the long term returns necessary to achieve their financial goals.  Simply put, you don’t want to have too many eggs in one basket.

I recently had an opportunity to contribute to an article written by Wayne Duggan for US News titled, “What is Modern Portfolio Theory?”  Duggan does a good job of describing the theory, which has thrived for over 60 years since its introduction by Harry Markowitz in 1952.  Fortunately, the tenets of modern portfolio theory, including appropriate diversification of various risky investment choices, along with an alphabet soup of Greek letters describing various components of the theory, are well ingrained in our investment philosophy and approach as well as those of most other financial advisors.  So, well-advised investors don’t need an in-depth understanding.  But, if you’d like a nice primer, click here to learn more.  Otherwise, feel free to call us and we’ll be happy to answer any questions you may have.


Horizon Advisors is a Houston based fee-only wealth management firm. Horizon is a fiduciary advisor. We specialize in helping successful individuals and families understand, organize, and manage their often complex financial situations. Horizon offers integrated financial planning and investment management services.

Owen Murray, CFA
Owen Murray joined Horizon Advisors in 2005. As a core member of the wealth management team, Owen is principally involved in investment research and portfolio construction.

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