The Minimalist Approach To Investing

Harry Markowitz, the father of modern portfolio theory (MPT), recently passed away. In simple terms, modern portfolio theory attempts to provide a framework to select investments and properly balance risk and return. His work was fundamental to the concept of an “efficient” portfolio.

As professional portfolio managers applied MPT and other research, it became more apparent that certain styles of investing are relatively simple but can still balance risk with a reasonable amount of investment return over time. The investment world has many certifications and licenses designed to regulate and educate financial professionals, but in the last couple of decades, the ability to craft a diversified portfolio that considers risk, return and diversification has become more accessible to the masses than before.