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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Modern Portfolio Theory

Definition:

Back in the 1950s, Harry Markowitz created this theory to create an investment portfolio or investment system for folks who were nervous about risk.

The highlights? Diversification is good and some risk is needed to reap the rewards. Balancing risk with proper diversification and tracking the results is good stuff.