Investors need to remember the basics of what makes a company successful and not focus solely on theories or factors when building portfolios, according to a recent paper by New York-based investment manager Epoch Investment Partners.

In the paper, The Limits of Theory, Epoch portfolio manager Steven Bleiberg looks at Modern Portfolio Theory (MPT), which was first developed in the 1950s, and why it may be hindering investors looking for active management.

“We believe that MPT has been a positive development in helping people to better understand investing. But like any theory, MPT is only a model of the way the real world works; it is not the real world itself.

To read the media release, click here.