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.
Next Up
BREAKING DOWN 'Harry Markowitz'
Prior to Markowitz's theories, emphasis was placed on picking single highyield 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.
RELATED TERMS

Multiple Discriminant Analysis ...
A statistical technique used to reduce the differences between ... 
Diversification
A risk management technique that mixes a wide variety of investments ... 
Portfolio
A grouping of financial assets such as stocks, bonds and cash ... 
Modern Portfolio Theory  MPT
A theory on how riskaverse investors can construct portfolios ... 
Correlation
In the world of finance, a statistical measure of how two securities ... 
Risk
The chance that an investment's actual return will be different ...
Related Articles

Investing Basics
Achieving Optimal Asset Allocation
Minimizing risk while maximizing return is any investor's prime goal. The right mix of securities is the key to achieving your optimal asset allocation. 
Options & Futures
6 Asset Allocation Strategies That Work
Your portfolio's asset mix is a key factor in whether it's profitable. Find out how to get this delicate balance right. 
Options & Futures
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves. 
Fundamental Analysis
The Capital Asset Pricing Model: An Overview
CAPM helps you determine what return you deserve for putting your money at risk. 
Active Trading
Modern Portfolio Theory: Why It's Still Hip
See why investors today still follow this old set of principles that reduce risk and increase returns through diversification. 
Investing Basics
What Does In Specie Mean?
In specie describes the distribution of an asset in its physical form instead of cash. 
Economics
Calculating Cross Elasticity of Demand
Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another. 
Fundamental Analysis
Emerging Markets: Analyzing Colombia's GDP
With a backdrop of armed rebels and drug cartels, the journey for the Colombian economy has been anything but easy. 
Fundamental Analysis
Emerging Markets: Analyzing Chile's GDP
Chile has become one of the great economic success stories of Latin America. 
Investing
Watch Your Duration When Rates Rise
While recent market volatility is leading investors to look for the nearest exit, here are some suggestions for bond exposure in attractive sectors.
RELATED FAQS

What level of correlation among investments will guarantee market returns but have ...
The efficient frontier set forth by modern portfolio theory (MPT) can provide an estimate of an optimal portfolio that allows ... Read Full Answer >> 
What is the utility function and how is it calculated?
In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >> 
How can I use a regression to see the correlation between prices and interest rates?
In statistics, regression analysis is a widely used technique to uncover relationships among variables and determine whether ... Read Full Answer >> 
According to the neoclassical growth theory, what factors influence the growth of ...
The neoclassical growth theory builds five major variables into its timesensitive production formula. The first is total ... Read Full Answer >> 
How do I calculate a modified duration using Matlab?
The modified duration gauges the sensitivity of the fixed income securities to changes in interest rates. To calculate the ... Read Full Answer >> 
How do I calculate the rule of 72 using Matlab?
In finance, the rule of 72 is a useful shortcut to assess how long it takes an investment to double given its annual growth ... Read Full Answer >>