While goals based investing may be more appealing to the retail public, how does one go about building the portfolios for each of the goals? Are they single asset classes? Fixed rate bonds? MPT provides a process for determining an appropriate asset allocation, given the tools one has to work with. Markowitz never said it was an exact science, nor that it would lead to the perfect portfolio. Assumptions matter, as do constraints, and asset classes. The true value of MPT is a disciplined process as opposed to guessing which asset classes to use in what amount. There is a reason MPT has survived for 60+ years and continues to be used by the largest asset managers in the world.

Retail clients can benefit from an understanding of the probabilities of outcomes provided by an MPT analysis. Where risk tolerance questionnaires can fail, ranges of outcomes and historical performance of an asset allocation can add tremendous value to a client determining an appropriate allocation.