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Early References to the Term Modern Portfolio Theory

Article Quant Q&A · Author: antonio
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Summary

The document investigates when the phrase “Modern Portfolio Theory” entered use, distinguishing the label from the ideas associated with Markowitz. It notes that Markowitz’s early work used different terminology and reports a 1965 article by Herbert Grubel that contains the phrase, which would place its use before a reference previously cited from 1971.

A second answer quotes Markowitz crediting Roy’s 1952 work alongside his own in the development of the field. This provides historical context about the theory’s intellectual lineage, but it does not establish who coined the term. The 1965 citation is presented as an early occurrence rather than a definitive first use, and the exchange supplies no systematic search of earlier publications.

Key ideas

  • Markowitz did not use the phrase “Modern Portfolio Theory” in the cited early work.
  • A 1965 article by Herbert Grubel is offered as an early published occurrence of the term.
  • The document cautions that this citation may not be the phrase’s first appearance.
  • Markowitz acknowledged Roy’s contribution to the ideas later associated with modern portfolio theory.

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Portfolio constructionStatistics
Full text
# Origin of the term Modern Portfolio Theory


# Origin of the term Modern Portfolio Theory












In his times, Markowitz did not claim his ideas were "modern". Not even the expression "Portfolio Theory" is ever used in his seminal paper and subsequent book, while he speaks instead of "Theory of Rational Behavior".

I am curious about who coined the term Modern Portfolio Theory?

## Answer by Theodore (score 1)

https://quant.stackexchange.com/a/43095

See Grubel, Herbert G. “Profits from Forward Exchange Speculation.” The Quarterly Journal of Economics, vol. 79, no. 2, 1965, pp. 248–262.

Modern portfolio theory is mentioned in this text, and it was published in May of 1965.

This also may not be the first reference, however it does beat the current #1 which is Fisher and Lorie of 1971 as added by Alex C.

## Answer by perseus harvest (score 0)

https://quant.stackexchange.com/a/41459

Markowitz: “On the basis of Markowitz (1952), I am often called the father of modern portfolio theory (MPT), but Roy (1952) can claim an equal share of this honor.”

Source: https://arxiv.org/pdf/0904.0870.pdf

Interesting paper on the evolution of the theoretical and practical risk/return relationship, from Bernoulli to MPT and CAPM, to VaR, to CVaR and coherent risk measures.

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.