Finch Hotz Daily: Harry Markowitz has died, but his portfolio theory legacy lives on. He says that while MPT might theoretically make sense, the changes in the relationship between stocks keep changing. Even a small change in this relationship can call for a complete revamp of stocks in the portfolio. But despite all this, people still use versions of MPT today.
Last week, Harry Markowitz died at the age of 95. He was a Nobel prize winner and the brains behind a famous economic (mathematical?) theory that explains how to diversify one’s investment portfolio.
So in today's episode for 28th June 2023, we thought we’d take a look back at his famous theory and see whether it still holds good today.