The Table presented below on this page compares the features of Modern Portfolio Theory (MPT), today’s industry-standard methodology for portfolio design and management, with those of Dynamic Investment Theory (DIT), an alternative to MPT created by the National Association of Online Investors (NAOI) that will play a significant role in the future of investing.

It Is Time for Change

For far too long the only choice given by financial advisors to individual investors are portfolios designed based on Modern Portfolio Theory (MPT) methods. The problem is that MPT was introduced to the market in the 1950s. Markets have changed significantly since then while MPT has barely changed at all. As a result, the static, buy-and-hold portfolios it creates can’t cope with today’s volatile markets. This needs to change.

The NAOI has met this need for change with the development of a new approach portfolio design and management called Dynamic Investment Theory (DIT). It was designed specifically to thrive in modern markets and to usher in a simpler, safer and less risky era of investing; one that will enable millions of individuals to participate in the market who are now on the sidelines in fear or the risks inherent in holding MPT portfolios today.

An MPT / DIT Comparison Table

The table presented below shows the difference between MPT and DIT methods in a variety of critical investing areas.

The market has never seen an investment type like Dynamic Investments. They were created by thinking-differently about how investing could and should work. But, it should be noted that the NAOI does not advocate that DIT replace MPT; although it could. The two approaches actually work quite well together. DIs can easily be used as building blocks in MPT portfolios to both increase the portfolios return and lower its risk as illustrated at this link.

More information on the benefits of using Dynamic Investment Theory and Dynamic Investments is found in the NAOI White Paper.