Most investors spend their time worrying about selecting
individual stocks and mutual funds: big mistake! Modern
Portfolio Theory—developed in 1952 by economics Nobel Prize
winner Harry Markowitz—shows that it’s more important to
focus on how our securities interact as a whole.
Astonishingly, most investors—including many
professionals—still run their investment accounts the same
way people did back when “How Much Is That Doggie In the
Window” played on the Hit Parade. It’s time to apply what
we’ve learned in financial economics over the past 50 years
to bring your portfolio into the rock-’n-roll era.
Armed with a computer, you, the investor, can use
sophisticated tools to analyze your holdings—tools that
would have been the envy of the biggest money managers only
a decade ago. First among these is the Monte Carlo
simulator: the better mousetrap that investors have been
waiting for.
With their trademark wit, Ben Stein and Phil DeMuth show you
how your current portfolio is radically underdiversified,
costing you money. They offer step-by-step instructions to
supercharge it across a variety of investment situations to
get you the best risk-adjusted returns.
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