Moving Beyond Modern Portfolio Theory: Investing That Matters

Moving Beyond Modern Portfolio Theory: Investing That Matters

by Jon Lukomnik, James P. Hawley

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Overview

Moving Beyond Modern Portfolio Theory: Investing That Matters tells the story of how Modern Portfolio Theory (MPT) revolutionized the investing world and the real economy, but is now showing its age. MPT has no mechanism to understand its impacts on the environmental, social and financial systems, nor any tools for investors to mitigate the havoc that systemic risks can wreck on their portfolios. It's time for MPT to evolve.

The authors propose a new imperative to improve finance's ability to fulfil its twin main purposes: providing adequate returns to individuals and directing capital to where it is needed in the economy. They show how some of the largest investors in the world focus not on picking stocks, but on mitigating systemic risks, such as climate change and a lack of gender diversity, so as to improve the risk/return of the market as a whole, despite current theory saying that should be impossible. "Moving beyond MPT" recognizes the complex relations between investing and the systems on which capital markets rely, "Investing that matters" embraces MPT's focus on diversification and risk adjusted return, but understands them in the context of the real economy and the total return needs of investors.

Whether an investor, an MBA student, a Finance Professor or a sustainability professional, Moving Beyond Modern Portfolio Theory: Investing That Matters is thought-provoking and relevant. Its bold critique shows how the real world already is moving beyond investing orthodoxy.



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Product Details

ISBN-13: 9780367760823
Publisher: Taylor & Francis
Publication date: 04/30/2021
Pages: 134
Sales rank: 440,294
Product dimensions: 6.12(w) x 9.19(h) x (d)

About the Author

Jon Lukomnik is the managing partner of Sinclair Capital LLC, a strategic consultancy to institutional investors, and a Senior Fellow at the High Meadows Institute.

James P. Hawley is Head of Applied Research at TruValue Labs, San Francisco and Professor Emeritus School of Economics and Business, Saint Mary College of California.

Table of Contents

List of figures viii

List of contributors ix

Acknowledgments x

Introduction 1

1 The MPT Revolution Devours Its Children 4

2 The MPT Paradox 28

3 Short-termism 48

4 Everything Old Is New Again 56

5 From Dividends in Nutmeg to Creating $5 Trillion: Welcome to the Third Stage of Corporate Governance 79

Conclusion 117

Bibliography 119

Index 128

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