For decades, your investment portfolio has revolved around a key academic idea that hasn’t held up very well: efficient markets. There’s a direct line from the efficient markets theory of Eugene Fama in the 1960s to modern portfolio theory. It paved the way for index funds, a strategy that has not only weathered market cycles but also become the default for managing pensions and retirement accounts.
As we step into a new era of digital finance, tokenized assets may offer a way to broaden our investment horizons in ways that traditional models have overlooked.
The genesis of modern portfolio theory
Index fund investing didn’t arise by chance. In the early 1970s, amid vigorous debates over market efficiency, Burton Malkiel’s seminal work advocating index funds in 1973 (in his book “A Random Walk Down Wall Street”) was embodied in John Bogle’s launch of the Vanguard S&P 500 fund in 1975.
This cemented a strategy that focused…
