Modern Portfolio Theory (MPT) is a strategy designed to balance the risk and return of assets in a portfolio based on the investor's risk tolerance. Introduced by Harry Markowitz in his 1952 paper "Portfolio Selection," MPT holds that the performance of an individual asset matters less than how it contributes to the overall risk and return of a diversified portfolio. Markowitz's work earned him the 1990 Nobel Memorial Prize in Economic Sciences, shared with William Sharpe and Merton Miller.
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Resources that put this concept to work.