The Markowitz model is an optimization model based on the principle of mean variance. The model supposes that a diversified portfolio is less volatile than the total sum of its individual parts.
Having countless possible portfolios, this model allows investors to select them based on minimum and maximum volatility levels to efficiently maximize returns.
The Markowitz model is closely related to the Capital Asset Pricing Model (CAPM), the price model for capital goods. The model was named after Harry Markowitz, who was awarded the Nobel Prize in Economics in 1990 along with Merton Miller and William Sharpe.