Opinion
What every investor in Australia’s sharemarket should know
Economist Orris Clemens Herfindahl created a concentration index in the 1950s that few know about in finance, but really should.
Arian NeironContributorIn the realm of investing, a couple of universal principles stand out – understand the interplay between risk and reward, and recognise the need for diversification.
Harry Markowitz, the pioneer of diversification, passed away earlier this year at the age of 95. His modern portfolio theory was grounded in the basic relationship between risk and reward. He showed that the risk in any portfolio is less dependent on the riskiness of its component securities and other assets than how they relate to one another.
Subscribe to gift this article
Gift 5 articles to anyone you choose each month when you subscribe.
Subscribe nowAlready a subscriber?
Introducing your Newsfeed
Follow the topics, people and companies that matter to you.
Find out moreRead More
Latest In Equity markets
Fetching latest articles