A CONCEPTUAL MODEL FOR PORTFOLIO MANAGEMENT SENSITIVE TO MASS PSYCHOLOGY OF MARKET
DOI:
https://doi.org/10.23055/ijietap.2011.18.1.161Keywords:
Portfolio management, Portfolio selection, Psychology of market, Conceptual modelAbstract
In an effort to model stock markets, many researchers have developed portfolio selection models to maximize satisfaction of investors. However, still this field suggests the need for more accurate and comprehensive models. Development of these models is difficult because of the unpredictable economic, social and political variables that surely affect manners of stock markets. The portfolio model developers have escaped the inspired complexity by some simplifying assumptions like absolute rationality of investors. In this paper a conceptual model for portfolio optimization is presented. Some important features of the model in comparison to others are: 1) Consideration of investors’ emotion or psychology of market that is arisen from the 3 above mentioned factors; 2) Significant loosing of simplifying assumptions about markets and stocks; 3) Ability of managing portfolio even according to any specified time interval. As a matter of fact the model is a modular one with modules that are designed in a way that the model can be used for both purposes of portfolio selection and management without the problems that are common in most of the previous ones.Downloads
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