Is It Possible To Build An Optimal Portfolio? (Modern Portfolio Theory Explained)

Every Investor wants to own a perfect investment that provides them high returns but low risk. People spend a lot of time coming up with methods to craft such optimal portfolios. In this video, we explore the most popular one - Modern Portfolio Theory (MPT) - developed in the 1950s by economist Harry Markowitz, who won a Nobel prize for it. We will delve into the concept of diversification, the balance between risk and return, and the efficient frontier to understand how investors can construct portfolios that maximize returns for any given level of risk. 🔎Get the Family Cashflow Tracker: https://beacons.ai/irenezhu/downloads 👉Check my monthly portfolio update and support the channel: https://www.patreon.com/irenezhu OR Youtube membership: https://www.youtube.com/channel/UCnyVuY5IqwgbGmwolhxd1vQ/join 👉 Check out my bookshelf and gears https://kit.co/Irene.Zhuaus Stock valuation Platform I use: 🔎Be a smart Value investor by using Seeking Alpha Premium to get 20% discount with 7-day trial: https://www.sahg6dtr.com/392M6MZ/R74QP/ 🔎 Build a data-driven portfolio for capital appreciation - Alpha Picks by Seeking Alpha - get 10% discount by using this link: https://www.sahg6dtr.com/392M6MZ/J8P3N/ Portfolio Management Platform I use: 📈 Manage your portfolio on Navexa and get 3 months off on your annual subscription (use code IRENE25 upon checkout): https://geni.us/tMIZQ0 Money Smart deals I Use (Australia ONLY) 🔌 Switch to low-cost Electricity - Ovo Energy to get $120 credit to your account over the 12 months: https://ovoenergy.com.au/refer/brendan2162 🔥 Switch your electricity & Gas by switching to Globird Energy (get $50 by quoting referral account 30151862) https://quote.globirdenergy.com.au/welcome 📱 Join Woolworth Everyday mobile(10% off your grocery shop once a month ) to get $10 WISH eGift card by using the code EBDFD8 https://mobile.everyday.com.au/ 📕 20万本英文原版电子书下载 200,000 English ebooks (10% off by using code 7053): https://ibook.life/7053 🎹 Music I use https://share.epidemicsound.com/2l6vj2 👩‍💻Tubebuddy https://www.tubebuddy.com/irenezhu 🛎️Disclaimer: Some of the links above are affiliate links, where I earn a small commission from your purchases at no additional cost to you. The content of the videos is for educational & entertainment purposes only and merely my opinions. I am not a financial adviser. All investments involve some risk, and there is no guarantee that you will succeed. To make the best financial decisions that suit your own needs, you must conduct your own research and seek the advice of a licensed financial adviser if necessary. Chapters 00:00 Intro 01:15 Modern Portfolio Theory 02:43 Ray Dalio on How MPT works 03:51 Harry Markowitz 04:34 Markowitz's aha moment 06:17 Efficient Frontier 07:11 Harry Markowitz Career 08:41 Criticism of MPT 11:48 Markowitz's personal portfolio 13:12 Can we use MPT?