Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 6th International Conference on Economic Management and Green Development (ICEMGD 2022), Part Ⅱ
Series Vol. 4 , 21 March 2023
Open
Access | Article
Modern Portfolio Theory: analysis and implication
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Abstract
The Modern Portfolio Theory (MPT) from quantitative theory explains the correct of the logic of investment which isn’t put all your eggs in one basket. Although this theory is published in 1952, investors are still using this theory nowadays. Therefore, this paper is researching why this theory is enduring, whether it can provide some insights into the behavior of investors, and what shortcomings can be solved by using other derivative theories based on this theory. The most significant observation of this study can be divided into two parts. Firstly, many limitations of MPT can be improved by Goal-based investing and Post-modern portfolio theory. Secondly, this theory can help the investor to choose the optimal portfolio theory depending on their attitude and goal when they chose the portfolio. There is a strong need for a novel approach, especially for concluding extra costs when investors calculate the risk-adjusted returns. After that, this theory is using historical data to calculate the expected data. Those limitations will influence the choice of optimal portfolio theory.
Keywords
Useful and limitation, Post modern portfolio theory., Portfolio theory, Goal-based investing
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- Volume Title
- Proceedings of the 6th International Conference on Economic Management and Green Development (ICEMGD 2022), Part Ⅱ
- ISBN (Print)
- 978-1-915371-17-1
- ISBN (Online)
- 978-1-915371-18-8
- Published Date
- 21 March 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/4/20221048
- Copyright
- 21 March 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited