BlackRock on how modern portfolio theory is misunderstood

Standard asset allocation is likely sub-optimal in a changing world, say strategists

Strategists at BlackRock say the idea of an anchor portfolio in asset allocation has become unhelpfully canonical – enshrined as if part of finance’s first principles, when it was never intended that way.

Harry Markowitz won a Nobel prize for his 1952 work on modern portfolio theory, which introduced the idea of efficient portfolios in which diversification across investments would achieve maximum return per unit of risk.

In the following years, building such portfolios around a mix of 60% stocks