Category Archives: Risk And Diversification

Modern Dividend Theory Explained Part 1 – Seeking Alpha

Modern Dividend Theory Explained Part 1 – Seeking Alpha: ccording to Investopedia, Modern Portfolio Theory (MPT) is defined as follows:

A theory on how risk-averse investors can construct portfolios to optimize or maximize expected [total] return based on a given level of market risk, emphasizing that risk is an inherent part of higher reward.

I’ve been thinking that it’s time we developed a parallel Modern Income Theory. Part of that would be a Modern Dividend Theory (MDT). I am going to restrict myself to the latter, because it is my area of expertise.

Modern Dividend Theory Explained Part 2: Risk And Diversification – Seeking Alpha

Modern Dividend Theory Explained Part 2: Risk And Diversification – Seeking Alpha: Back in March, I published “Modern Dividend Theory Explained.” It was an initial effort to construct a framework for an income theory that could stand beside Modern Portfolio Theory (MPT). My main goal was and remains to provide a theoretical framework for MDT (Modern Dividend Theory). At some point, MDT might be widened out to Modern Income Theory (MIT), but for the moment I am just focusing on dividends from stocks.

Before I discuss risk and diversification, I want to come closer to constructing a brief definition of MDT.

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