Most people buy or sell one investment at a time.
Modern Portfolio Theory, on the other hand, analyzes investments as a group. Pioneered by Markowitz, Sharpe and Miller, the MPT received the Nobel Prize for Economics in 1990 and is widely used by some of the largest and most successful pension funds and portfolio managers. It is now a legal requirement for use within trusts in many states. One of our newer members surprised us one day with a courtesy call to advise us that they were abandoning the investment plan we had helped them design. It seems an out-of town insurance salesman had knocked on their door and offered them an annuity which would not fluctuate in value, as their diversified portfolio had.