Harry Markowitz Quotes

Best 22 Quotes by Harry Markowitz

“A good portfolio is more than a long list of good stocks and bonds. It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of contingencies.”

“Advisors can create the best portfolios in the world, but they won’t really matter if the clients don’t stay in them.”

“Becoming an economist was not a childhood dream of mine.”

“Diversifying sufficiently among uncorrelated risks can reduce portfolio risk toward zero.

But financial engineers should know that's not true of a portfolio of correlated risks.”

“During the 1950s, I decided, as did many others, that many practical problems were beyond analytic solution and that simulation techniques were required.”

“I never was aware of the Great Depression.”

“I only have one piece of advice: Diversify.

And if I had to offer a second piece of advice, it would be: Remember that the future will not necessarily be like the past. Therefore we should diversify.”

“I would never be 100 percent in stocks or 100 percent in bonds or cash.”

“If the investor doesn't have enough time and skill to investigate individual stocks or enough money to diversify a portfolio, the right thing to do is to invest in exchange-traded funds that give you exposure to asset classes.

It does make sense for the individual investor to think in terms of holding individual asset classes.”

“In choosing a portfolio, investors should seek broad diversification, Further, they should understand that equities--and corporate bonds also--involve risk; that markets inevitably fluctuate; and their portfolio should be such that they are willing to ride out the bad as well as the good times.”

“It's like a crapshoot in Las Vegas, except in Las Vegas the odds are with the house. As for the market, the odds are with you, because on average over the long run, the market has paid off.”

“My two favourite philosophers were Descartes and Hume. I read Plato and Aristotle, of course. I couldn’t understand Kant.”

“One hundred securities whose returns rise and fall in near unison afford little protection than the uncertain return of a single security.”

“Perhaps the most important job of a financial advisor is to get their clients in the right place on the efficient frontier in their portfolios.

But their No. 2 job, a very close second, is to create portfolios that their clients are comfortable with. Advisors can create the best portfolios in the world, but they won't really matter if the clients don't stay in them.”

“Portfolio theory, as used by most financial planners, recommends that you diversify with a balance of stocks and bonds and cash that's suitable to your risk tolerance.”

“The Bible knew about the importance of diversification! The Bible said you should invest in three asset classes.

Shakespeare knew about it too. In 'The Merchant of Venice', Antonio is asked, "Why are you so glum? Is your business going badly?"

And he replies, “Believe me, no. I thank my fortune for it — My ventures are not in one bottom trusted, Nor to one place, nor is my whole estate, Upon the fortune of this present year.”

So he knew about diversification.”

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“There is one investment truism that, if followed, can dependably increase your investment returns: Minimize your investment costs.”

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“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.”

“There are many resistance movements in the world, like the IRA for instance. But it is only Islamic resistance movements that are put on the terrorist list. This is what I am saying.”

“To reduce risk it is necessary to avoid a portfolio whose securities are all highly correlated with each other. One hundred securities whose returns rise and fall in near unison afford little protection than the uncertain return of a single security.”

“We next consider the rule that the investor does or should consider expected return a desirable thing and variance of return an undesirable thing.”

“When I was in high school I was a nerd — before the girls found out that nerds could make lots of money!”

“Winston Churchill was a great man who wrote and spoke great speeches as the leader of a great cause: Great. Great. Great!”

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“Managed funds are astonishingly tax-inefficient.”

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