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Customer Quote by Harry Markowitz

“We next consider the rule that the investor does or should consider expected return a desirable thing and variance of return an undesirable thing.” quote by Harry Markowitz
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“We next consider the rule that the investor does or should consider expected return a desirable thing and variance of return an undesirable thing.”

Harry Markowitz

About This Quote

Source Book: Portfolio Selection, 1952

Investors should view expected return as desirable and variance as undesirable, establishing the risk‑return trade‑off foundation.

In simple terms: Return is good; variance is bad.

Key Takeaway

Balance risk and reward in investing.

Themes

finance risk management investment

Mood

analytical educational

Type

financial theoretical

When to use this quote

  • financial planning
  • risk assessment
  • asset allocation

Key Concepts

portfolio theory modern finance

Questions to Reflect On

  • How does diversification affect variance?
  • When is higher variance acceptable?
A Different Perspective

Variance can be useful for diversification, not just a negative.

4.9 out of 5 (6 ratings)

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