Can you think of a different theory that might provide investment advice in this situation?

Investment management | Business & Finance homework help

Yes, one theory that might provide investment advice in this situation is the Modern Portfolio Theory (MPT). This theory suggests that securities should be combined into portfolios based on their risk and return characteristics so as to maximize an investor’s expected return for a given level of risk. Additionally, it postulates that investors should diversify their portfolio across different asset classes such as stocks and bonds in order to reduce overall risk. Finally, MPT also states that investors should constantly review their portfolios and adjust them as needed according to changes in markets or personal goals. By employing these techniques, individuals can create a successful investment strategy tailored specifically for their own needs.