Harry Markowitz
WHO'S WHO IN FINANCEHarry Markowitz is known for his work in developing Modern Portfolio Theory. In the 1950s, his research laid the first stone of understanding how investors can build the highest-performing portfolios by balancing their risks and returns. He introduced the concept of diversification, showing the importance of spreading investments out across many different asset classes to reduce one’s overall risk.
Markowitz's contributions represent a pillar in investment theory and shape how today’s professionals and individuals approach portfolio management globally. By mathematically showing the benefits of diversification and the trade-off between risk and return, he gave investors a framework that continues to be used to guide them in developing portfolios that are both well-balanced and effective.
Accolades:
- Nobel Prize in Economic Sciences in 1990 for his work on portfolio theory
- John von Neumann Theory Prize 1989
- The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1990
- Institute for Operations Research and the Management Sciences Fellow 2002
- President of the American Finance Association 1982 Also Fellow of the association
- Fellow of the Econometric Society elected 1959
Quote:
“The chief problem with the individual investor: He or she typically buys when the market is high and thinks it's going to go up, and sells when the market is low and thinks it's going to go down” (Markowitz, Harry).