Investment analysis by Markowitz model

a brief review of the literature and its application in Excel

Abstract

The present study is a systematic review of the literature on Modern Portfolio Theory, formulated by Harry Max Markowitz in 1952 in his article “Portfolio Selection”, which aims to optimize asset portfolios. The research was based on the following aspects: bibliographic, documentary research and construction and didactic application of Asset Diversification in Excel, with the use of hypothetical data (only for understanding the model) to support the respective Markowitz theory. Emphasis was placed on the concepts inherent to the investment area and also on the statistical part, aiming to simplify and make reading easy to understand, even for lay readers, serving as a basis for them to get deeper into the topic. As a result, it was possible to observe the impact that Markowitz's contribution brought to the development of theories on financial markets.