Asset Allocation & Risk
What is modern portfolio theory?
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Modern portfolio theory, proposed by Harry Markowitz in 1952, is an analytical framework for finding the combination of assets that maximizes expected return for a given level of risk.
It evaluates each asset not on its own but by its effect on the risk and return of the portfolio as a whole, and it uses the variance (standard deviation) of returns as the measure of risk. Markowitz received the Nobel Prize in Economics in 1990 for this contribution.
This answer is general financial information as of 14-10-2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.
