Modern portfolio theory

Modern Portfolio Theory (MPT) is a way of deciding how to invest your money to get the most benefit with the least amount of risk. To do this, you will need to look at the types of investments you can choose from, such as stocks and bonds, and decide how much of each kind of investment to buy.
MPT describes how you can combine different types of investments in an "optimal" portfolio, which will help you get the most potential return for the least amount of risk. MPT looks at the expected return and risk of each investment, and works out a combination of investments that will give you the best results. It is therefore a good way to help you decide which combination of investments to choose for your portfolio.