New Books In Economics

Of what use is history, particularly for economists and people in finance? If you’ve ever wondered about this, you should read Daniel Peris‘s book Getting Back to Business: Why Modern Portfolio Theory Fails Investors and How You Can Bring Common Sense to Your Portfolio (McGraw-Hill Education, 2018). Before he became a portfolio manager, Peris was a professional historian. He was trained as such, wrote books about such, and taught such. In Getting Back to Business, he brings his background in this regard to a little considered question: Why, historically speaking, do we invest money the way we do? The “we” here is your financial advisor and, if you invest your own money, you. And you use something called “Modern Portfolio Theory” or MPT. That theory—like any theory—has a history. It was created by particular people in a particular historical context for a specific historical purpose. It was a tool fit for that specific historical purpose. Peris masterfully traces