Dr. Harry Markowitz was the founder of portfolio selection, he won a share of the Nobel Prize in 1990 for his research on "Financial Economics". Dr. Harry Markowitz invested portfolio selection and published it in 1959, which was the foundational stage of modern portfolio theory. According to Dr. Harry Markowitz and his Portfolio Selection, the process of selecting a portfolio can be divided into two levels. The first level begins with the investigation and testing of the future performance of available resources. The second level begins with the relative beliefs about the future trend of the available assets and ends with the choice of the portfolio. To choose the portfolio there are rules that an investor must follow. One of the rules is that the investor should obtain the maximum expected future profit from the value of his capitalized asset. Portfolio theory can be used by economic agents acting in uncertain situations. This comes from the fact that in the real market world nothing is certain. A verified example is the manufacturing environment where there is a time lag between the manufacturing decision, the manufacturing process and the sale of the product, which leads us to the conclusion that the selling price is uncertain at the beginning of the process. Institutional investors can use this theory. Portfolio theory has six basic principles according to Dr. Harry Markowitz. The first states that investors are not willing to take risks in their portfolio and the only risk they accept is that which balances out with their returns. The second principle states that market prices are satisfied and logical. The third principle states that the portfolio should be distributed as an entire selection of securities. The fourth principle states that... middle of the paper... n started with the right strategy. Some managers have more valid information than others. If managers followed the correct strategy, investments would have the right performance. Modern portfolio theory was not the reason for the 2008-2009 recession. The reason for the recession was managers' mishandling of modern portfolio theory. Works Cited http://www.simonemariotti.com/downloads/Papers%20finanziari/Fabozzi-Gupta-Mar.pdfhttp://pages.stern.nyu.edu/~eelton/papers/97-dec.pdfhttp://www .emh.org/Mark91.pdfhttp://www.isectors.com/pdf/article_Principals %20of%20Modern%20Portfolio%20Theory%20Continue%20to%20Inspire.pdfhttp://www.iiis.org/CDs2010/CD2010IMC/ICEME_2010 /PapersPdf/FB583RP.pdfhttp://www.onwallstreet.com/ows_issues/2010_5/in -defense-of-modern-portfolio-theory-2666592-1.htmlhttp://monevator.com/2009/02/26/portfolio - diversification/