The article discusses how Modern Portfolio Theory helps individual investors create portfolios with low risk and good returns by combining different stocks. It explains that stocks have two types of risk: market risk and stock-specific risk. Market risk is measured by beta, which is important for determining the overall risk of a portfolio. By accurately pricing stocks based on analysts' expectations, portfolio managers ensure that stock prices reflect a company's long-term prospects. Combining stocks into a portfolio helps minimize stock-specific risk, making it easier for investors to manage their investments effectively.