| Issue |
SHS Web Conf.
Volume 129, 2021
The 21st International Scientific Conference Globalization and its Socio-Economic Consequences 2021
|
|
|---|---|---|
| Article Number | 03009 | |
| Number of page(s) | 7 | |
| Section | Financial Management and Financial Markets | |
| DOI | https://doi.org/10.1051/shsconf/202112903009 | |
| Published online | 16 December 2021 | |
The global aspect of investing
University of Zilina, Faculty of Operation and Economics of Transport and Communications, Univerzitna 1, 010 26 Zilina, Slovakia
* Corresponding author: barbora.gabrikova@stud.uniza.sk
Research background: Investing in the capital market is one of the ways for an investor to increase his income. Investing in the capital market is described as very risky, but it provides us with an opportunity to achieve high returns. There is an infinite number of assets on the market that an investor can include in his portfolio, and which assets he chooses to invest in will ultimately affect the return and risk of the created portfolio. Therefore, the investor should think rationally and should try to reduce the risk of his investment.
Purpose of the article: This article aims to point out the effect of diversification through the creation of a portfolio of financial assets.
Methods: This paper uses modern portfolio theory and focuses on the use of the Markowitz model. The optimal weights of individual assets in the compiled portfolio are calculated using the Lagrange function. We use data on weekly closing prices of individual stocks, commodity and mutual fund.
Findings & Value added: The main finding was that the risk associated with the created portfolio is lower than the risk associated with investing in individual assets.
Key words: diversification; / asset investment; / modern portfolio theory; / return; / risk
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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