No matter how much money they want to invest, all investors are looking for the highest yield combined with the highest level of safety. However, no single form of capital investment can meet all investment targets: A high-yield investment is usually riskier, while a safe investment often only offers low potential yields.
The right mix of different forms of investment allows investors to take all investment targets into account: The potential yield of an asset portfolio increases with its safety. The American Harry M. Markowitz won the Nobel Prize for this finding in 1990. The apparently simple saying "Do not put all your eggs in one basket" is the basis of modern portfolio theory and the most important foundation for a professional investment strategy.
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