Experts Are at a Loss on Investing

Nobel winners and top academics fumble the sorts of decisions Bush's Social Security overhaul plan would ask average Americans to make.

By Peter G. Gosselin
Times Staff Writer

May 11, 2005

WASHINGTON — Harry M. Markowitz won the Nobel Prize in economics as the father of "modern portfolio theory," the idea that people shouldn't put all of their eggs in one basket, but should diversify their investments.

However, when it came to his own retirement investments, Markowitz practiced only a rudimentary version of what he preached. He split most of his money down the middle, put half in a stock fund and the other half in a conservative, low-interest investment.

"In retrospect, it would have been better to have been more in stocks when I was younger," the 77-year-old economist acknowledged.