The actual theory of financial assets' portfolio management is a refinement of the "modern portfolio theory
" (Mean-Fariance Analysis) initiated by Harry Markowitz.
* Modern portfolio theory
and multi-factor risk models
This suggestion is called Modern Portfolio Theory
. It holds that a diversified range of assets will produce not only more consistent, but also better returns over time than contending ways of running a portfolio, namely securities selection and market timing.
A professor specializing in 19th-century Irish literature instead of modern portfolio theory
should not have less of a say than his business school colleagues in the future of the institution.
The patent portfolio theory
thus explains what is known as "the patent paradox": in recent years patent intensity--patents obtained per research and development dollar--has risen dramatically even as the expected value of individual patents has diminished.
Johnson, 1996, "Speculating on the Efficacy of Speculation--An Analysis of the Prudent Persons Slipperiest Term of Art in Light of Modern Portfolio Theory
", Stanford Law Review, 48:419-447
The basic rule of spreading your risk has been extended by the modern portfolio theory
that tests the returns of a combination of assets against the volatility of that combination.
The primary subject matter of this case is to demonstrate an application of modern portfolio theory
in construction and measurement of performance of an investment portfolio.
This diversification of risk, as described in portfolio theory
, mitigates the total risk.
This became Markowitz's doctoral study and created a concept known as Modern Portfolio Theory
, MPT for short.
Seminar attendees will learn the basic mechanics of portfolio theory
, develop an understanding of commercial real estate investment and portfolio management terminology, learn to effectively communicate with portfolio managers and other real estate investment professionals, explore the opportunities and pitfalls of including commercial real estate in the broader investment portfolio, develop an understanding of alternative commercial real estate investment vehicles and learn how to implement a portfolio management strategy.
As Modern Portfolio Theory
teaches, financial markets are by their nature unpredictable.