Is the Capital Asset Pricing Model (CAPM) Still Relevant?
Harry Markowitz established Modern Portfolio Theory (MPT) and the investment concept of diversification in 1952. One of Markowitz’ doctoral students, William Sharpe, streamlined his work and developed a more accessible approach to diversification known as the Capital Asset Pricing Model (CAPM). For their work, both individuals were awarded the Nobel Prize in Economic Sciences in […]
Is Modern Portfolio Theory Still Relevant?
Modern Portfolio Theory (MPT) is the mathematical framework that powers the investment concept of diversification, which posits that investors can minimize the volatility of their portfolio and maximize their expected return by investing in a diversified portfolio of risky financial assets. Nobel Prize winner Dr. Harry Markowitz introduced Modern Portfolio Theory in his 1952 research […]
What is the Stock Market and How Does it Work?
A stock market is a place where willing buyers and sellers exchange stocks. Most publicly traded companies have their stock listed on a stock market exchange, such as the New York Stock Exchange (NYSE) or the National Association of Securities Dealers Automated Quotations (NASDAQ). Similar exchanges exist in most major economies throughout the world, many of […]
Less is More in the Bizarre World of Investing
If I ask you what you will be doing 10 minutes from now, you can probably give me an accurate answer. But what if I ask about your plans in 10 months? It’s unlikely that you know for certain. What about 10 years from now? That would be almost impossible to answer, right? You know far more about […]