知識社群ePortfolio登入
Introduction to Modern Portfolio Theory ( Introduction to Modern Portfolio Theory)
1樓

Introduction to Modern Portfolio Theory

The purpose of this article is to provide a brief explanation of Markowitz’s modern portfolio theory and how you can use it to more effectively allocate your investment portfolio.  

Perhaps equally important to what will be covered is what is excluded: this is not a mathematical derivation of the model.  For a thorough explanation of the math behind the model, see this article in Wikipedia.  The objective of this article is to show how you can apply modern portfolio theory in real life to create an optimized portfolio.


Portfolio theory

 
the study of the way in which an individual investor may theoretically achieve the 
maximum expected return from a varied PORTFOLIO of FINANCIAL SECURITIES that has attached to it a given level of RISK.

Alternatively, the portfolio may achieve for the investor a minimum amount of risk 
for a given level of expected return.Return on a security comprises 
INTEREST or DIVIDEND, plus or minus any CAPITAL GAIN 
or loss from holding the security over a given time period. 

The expected return on the collection of securities within the portfolio is the 
weighted average of the expected returns on the individual INVESTMENTS 
that comprise the portfolio. The important thing, however,is that the risk attaching 
to a portfolio is less than the weighted average risk of each individual investment. 


Introduction

In its simplest form, portfolio theory is about finding the balance between maximizing your return and minimizing your risk.  The objective is to select your investments in such as way as to diversify your risks while not reducing your expected return. It is actually simple to apply and effective.  While it does not replace the role of an informed investor, it can provide a powerful tool to complement an actively managed portfolio.
附件
2樓

Portfolio theory

 

the study of the way in which an individual investor may theoretically achieve the 
maximum expected return from a varied PORTFOLIO of FINANCIAL SECURITIES that has attached to it a given level of RISK.

Alternatively, the portfolio may achieve for the investor a minimum amount of risk 
for a given level of expected return.Return on a security comprises 
INTEREST or DIVIDEND, plus or minus any CAPITAL GAIN 
or loss from holding the security over a given time period. 

The expected return on the collection of securities within the portfolio is the 
weighted average of the expected returns on the individual INVESTMENTS 
that comprise the portfolio. The important thing, however,is that the risk attaching 
to a portfolio is less than the weighted average risk of each individual investment. 

回應