Harry Markowitz


DEFINITION of 'Harry Markowitz'

A Nobel Memorial Prize winning economist who devised the modern portfolio theory in 1952. Markowitz's theories emphasized the importance of portfolios, risk, the correlations between securities and diversification. His work changed the way that people invested.

BREAKING DOWN 'Harry Markowitz'

Prior to Markowitz's theories, emphasis was placed on picking single high-yield stocks without any regard to their effects on portfolios as a whole. Markowitz's portfolio theory would be a large stepping stone towards the creation of the capital asset pricing model.

  1. Multiple Discriminant Analysis ...

    A statistical technique used to reduce the differences between ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments ...
  3. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  4. Modern Portfolio Theory - MPT

    A theory on how risk-averse investors can construct portfolios ...
  5. Correlation

    In the world of finance, a statistical measure of how two securities ...
  6. Risk

    The chance that an investment's actual return will be different ...
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