ILAB 109 – Why Modern Portfolio Theory Fails Investors with Daniel Peris

“This idea of mean-variance optimization simply doesn’t make sense in modern investing anymore”

Daniel Peris


DANIEL PERIS, Ph.D., CFA, is Senior Vice President and Senior Portfolio Manager at Federated Investors, Inc., in Pittsburgh where he oversees $20 billion dollars in equity portfolios the firm’s dividend-oriented funds.

Before transitioning into asset management, Peris was a historian focuses on modern Russian history. He is the author of two prior books in investing, The Strategic Dividend Investor, and The Dividend Imperative, and the new book Back to Business.

During this episode, Daniel will talk about how you can bring some common sense back to your investing. He’ll speak on some old strategies that just don’t work anymore including why Modern Portfolio theory may not be the answer. Expect to learn how to achieve higher yields including tips to managing your Index funds, Mutual funds, and SMAs. Find out if you really need a financial advisor to get the most out of your investing and how to choose one properly.

Listen to the end for insight into Sam Marks and Johnny FDs percent earnings and thought on incorporating this concept into their portfolio.

Listen to ILAB 109 on iTunes here or subscribe on your favorite podcast app.


ILAB 109 Show Notes


Where are we:

  • Johnny & Sam: Thailand
  • Daniel Peris – Pittsburg, Pennslyvania


Daniel’s Book:

Episode Links:


  • ArtofFX – Start with just a $10,000 account (reduced from $25,000)
  • Fundrise – Start with only $1,000 into their REIT funds (non-accredited investors OK)
  • Betterment – Get up to 1 year managed free
  • PeerStreet – Get a 1% yield bump on your first loan
  • Traveling Mailbox – get 5% off subscriptions with ‘ILAB’ promo code


Time Stamps:

  • 06:06 – Managing $20 billion in equity portfolios
  • 07:45 – Being interested in modern portfolio theory
  • 11:01 – Modern Portfolio Theory vs Efficient Market Theory
  • 16:41 – “You don’t have to believe in mean-variance optimization, Modern Portfolio Theory, to want to be a passive investor” – Daniel Peris
  • 19:45 – Is the Modern Portfolio Theory failing investors?
  • 20:33 – “This idea of mean-variance optimization simply doesn’t make sense in modern investing anymore” – Daniel Peris
  • 25:26 – Achieving higher yield
  • 33:08 – Managing your Index funds, Mutual funds, and SMAs
  • 36:55 – Dividend investing and tax bracket benefits
  • 38:44 – Do you need a financial advisor to get high yields?
  • 48:55 – “At the end of the day what really matters… is trust” – Daniel Peris
  • 53:29 – Mutual funds to highlight
  • 56:50 – The superior open approach 50 years from now
  • 01:00:52 – Cashing out your dividends & calculating earnings


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