Post-modern portfolio theory supports diversification in an investment portfolioto measure investmentâ€™s performance
Journal of Finance and Investment Analysis, 2012, vol. 1, issue 1, 3
This study looks at the Post-Modern Portfolio Theory that maintains greater diversification in an investment portfolio by using the alpha and the beta coefficient to measure investment performance. Post-Modern Portfolio Theory appreciates that investment risk should be tied to each investorâ€™s goals and the outcome of this goal did not symbolize economic of the financial risk. Post-Modern Portfolio Theoryâ€™s downside measure generated a noticeable distinction between downside and upside volatility. Brian M. Rom & Kathleen W. Ferguson, 1994, indicated that in post-Modern Portfolio Theory, only volatility below the investorâ€™s target return incurred risk, all returns above this target produced â€˜ambiguityâ€™, which was nothing more than riskless chance for unexpected returns.
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Persistent link: https://EconPapers.repec.org/RePEc:spt:fininv:v:1:y:2012:i:1:f:1_1_3
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