You might have heard of the Modern Portfolio Theory developed by Harry Markowitz which optimized returns based on a given level of risk. This theory supports the concept that introducing uncorrelated asset classes into a portfolio improves the risk return profile.

I recently came across an mobile application from the US called¬†Acorns¬†which helps investors, mainly targeted to household who has yet to start any investing, to make regular small investments into a basket of portfolio by using spare change from your everyday purchases by rounding up each amount to the next dollar automatically. For instance, if you spend $4.50 on Subway and uses the apps to record the transaction, it will read as $5 and pushes the rest of the $0.50 into your Acorns account. This amount will then get accumulated at the end of the month and are used to purchase a basket of indexes …