Modern Portfolio Theory Technical analysis is laughable.
Fundamental analysis is fruitless.
In searching for superior investment returns, all that matters, in the world of Modern Portfolio Theory, or MPT for short, is a stock or mutual fund's expected return , standard deviation and its correlation with the other stock or mutual funds contained in the portfolio. Using these three factors, an efficient portfolio can be constructed. An efficient portfolio is a group of investments which has the highest expected return given the amount of risk assumed, or, conversely, contains the lowest possible risk for a given expected return. The concepts behind MPT were developed by Harry Markowitz in 1952, then a doctoral candidate at the University of Chicago. His thesis was almost rejected because the panel didn't think the topic had anything to do with economics.