Stock portfolio selection under unstable uncertainty via fuzzy mean-semivariance model

Investing in stock market requires in-depth knowledge of finance and stock market dynamics. Stock Portfolio Selection and management involve complex financial analysis and decision making policies. An Individual investor seeking to invest in stock portfolio is need of a support system which can guide him to create a portfolio of stocks based on sound financial analysis. In this paper the authors designed a Financial Decision Support System (DSS) for creating and managing a portfolio of stock which is based on Artificial Intelligence (AI) and Machine learning (ML) and combining the traditional approach of mathematical models. We believe this a unique approach to perform stock portfolio, the results of this study are quite encouraging as the stock portfolios created by the DSS are based on strong financial health indices which in turn are giving Return on Investment (ROI) in the range of more than 11% in the short term and more than 61% in the long term, therefore beating the market index by a factor of 15%. This system has the potential to help millions of Individual Investors who can make their financial decisions on stocks and may eventually contribute to a more efficient financial system.

Download Full-text

A New Decision-Making Method for Stock Portfolio Selection Based on Computing with Linguistic Assessment

Journal of Applied Mathematics and Decision Sciences ◽

10.1155/2009/897024 ◽

2009 ◽

Vol 2009 ◽

pp. 1-20 ◽

Cited By ~ 11

Author(s):

Chen-Tung Chen ◽

Wei-Zhan Hung

Keyword(s):

Decision Making ◽

Portfolio Selection ◽

Quantitative Data ◽

Decision Makers ◽

Stock Selection ◽

Qualitative And Quantitative ◽

Selection Problems ◽

Different Types ◽

Linguistic Assessment ◽

Stock Portfolio

The purpose of stock portfolio selection is how to allocate the capital to a large number of stocks in order to bring a most profitable return for investors. In most of past literatures, experts considered the portfolio of selection problem only based on past crisp or quantitative data. However, many qualitative and quantitative factors will influence the stock portfolio selection in real investment situation. It is very important for experts or decision-makers to use their experience or knowledge to predict the performance of each stock and make a stock portfolio. Because of the knowledge, experience, and background of each expert are different and vague, different types of 2-tuple linguistic variable are suitable used to express experts' opinions for the performance evaluation of each stock with respect to criteria. According to the linguistic evaluations of experts, the linguistic TOPSIS and linguistic ELECTRE methods are combined to present a new decision-making method for dealing with stock selection problems in this paper. Once the investment set has been determined, the risk preferences of investor are considered to calculate the investment ratio of each stock in the investment set. Finally, an example is implemented to demonstrate the practicability of the proposed method.

Download Full-text