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Portfolio advice before modern portfolio theory : the belle epoque for french analyst Alfred Neymarck


  • Cécile Edlinger

    (Bureau d'Économie Théorique et Appliquée)

  • Maxime Merli

    (Université de Strasbourg (UNISTRA))

  • Antoine Parent

    (Observatoire français des conjonctures économiques)


In this article, we propose an original analysis of advice given by financial analysts prior to WW1. Our article focuses on the writings of A. Neymarck, one of the most popular French analysts in the early 20th Century. The creation of portfolios from a new database composed of the monthly returns of all the security types listed on the official Paris Stock Exchange from 1903 to 1912 has provided results demonstrating that Neymarck correctly identified the risk in a number of sectors. The performances of these portfolios, which were built according to Neymarck’s guidelines, confirm Neymarck’s ranking in terms of both risk and return: the richer the investor, the riskier and the more profitable his portfolio was seen to be. Finally, the Modern Portfolio Theory enables us to pinpoint the few imperfections in Neymarck’s advice, which globally appears to be driven by reliable financial analysis.

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  • Cécile Edlinger & Maxime Merli & Antoine Parent, 2019. "Portfolio advice before modern portfolio theory : the belle epoque for french analyst Alfred Neymarck," Sciences Po publications info:hdl:2441/5uiggte9218, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/5uiggte9218fho46bb53jr7m8a

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    References listed on IDEAS

    1. William N. Goetzmann & Andrey D. Ukhov, 2006. "British Investment Overseas 1870-1913: A Modern Portfolio Theory Approach," Review of Finance, European Finance Association, vol. 10(2), pages 261-300.
    2. David Le Bris & Pierre-Cyrille Hautcoeur, 2010. "A challenge to triumphant optimists? A new blue chips Index for the Paris stock-exchange (1854-2007)," Post-Print halshs-00754455, HAL.
    3. David Le Bris & Pierre-Cyrille Hautcoeur, 2009. "A challenge to triumphant optimists? A blue chips index for the Paris Stock-Exchange (1854-2007)," Working Papers halshs-00586765, HAL.
    4. Parent, Antoine & Rault, Christophe, 2004. "The Influences Affecting French Assets Abroad Prior to 1914," The Journal of Economic History, Cambridge University Press, vol. 64(2), pages 328-362, June.
    5. Le Bris, David & Hautcœur, Pierre-Cyrille, 2010. "A challenge to triumphant optimists? A blue chips index for the Paris stock exchange, 1854–2007," Financial History Review, Cambridge University Press, vol. 17(2), pages 141-183, October.
    6. Janette Rutterford & Dimitris P. Sotiropoulos, 2016. "Financial diversification before modern portfolio theory: UK financial advice documents in the late nineteenth and the beginning of the twentieth century," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 23(6), pages 919-945, November.
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    More about this item


    Portfolio advice; Diversification before WW1; Financial markets prior WW1;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N83 - Economic History - - Micro-Business History - - - Europe: Pre-1913

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