What are the disadvantages of modern portfolio theory?

QuestionsWhat are the disadvantages of modern portfolio theory?
Akshaj Singh asked 1 year ago
   
3 Answers
Deepak Goyal answered 1 year ago
The following are the disadvantages of modern portfolio theory:
  • It always considers the past performance of a company while analyzing various data.
  • It states that any type or kind of security can be sold which is impractical in real life situations.
  • It assumes a normal distribution of return which is not possible in real life situations. 
   
Nikhil Rawat answered 1 year ago
Modern portfolio theory was developed in the 1980s to help students select their majors based on their strengths and interests. It has since been adopted by many industries as a way to identify potential employees. The disadvantages of modern portfolio theory include the lack of a single, universal definition for what a portfolio is, and the lack of a standard way to evaluate portfolios. Additionally, it doesn't provide any benchmark for evaluating portfolios or measuring progress over time.  
Priya Vishwas answered 1 year ago
Modern portfolio theory is a concept that has been around since the 1980s. It was originally developed to assess a student’s skills in the classroom, but it has now been applied to the job market and career development. The disadvantages of modern portfolio theory are that it can be difficult for students to show their true skills and potential. They may not be able to highlight their strengths or weaknesses when they are trying to apply for jobs. This is because they do not have enough time or resources in order to show off their work in a meaningful way.