Risk-Return Analysis, Volume 2: The Theory and Practice of Rational Investing

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THE FUTURE

Harry M. Markowitz

INTRODUCTION

MPT is now 62 years old.¹ Sixty-two years from now, in 2076, the United States will be 300 years old and MPT will be 124. Much has happened to the world and financial practice in the past 62 years. For example, 1952 saw the birth of MPT, whereas the recent BNY Mellon (2014) survey estimates that the majority of endowments and pension plans—controlling tens of trillions of dollars’ worth of assets—use MPT regularly. In 1952, the modern computer was in its infancy. Now the computing capabilities of cell phones are the stuff of 1950s science fiction. Finally, the infrastructure that now makes MPT practical—including financial databases, models of expected returns, models of covariance, the top-down ...