Portfolio diversification: the role of information technology in future investment decision-making

Authors:
Mohamed Zulkifli;Basri Basaruddin Shah;Mohd Daud Norzaidi;Siong Choy Chong
Affiliations:
Faculty of Business Management, Universiti Teknologi MARA, Johor Branch, Segamat, Johor, Malaysia.;Faculty of Business Management, Universiti Teknologi MARA, Johor Branch, Segamat, Johor, Malaysia.;Research Management Institute, Accounting Research Institute, Faculty of Business Management, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia.;Putra International College, Lot 1838, Mukim Bukit Katil, Ayer Keroh, Melaka, Malaysia
Venue:
International Journal of Electronic Finance
Year:
2008

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Abstract

Today's uncertain and volatile market conditions require investors to utilise Information Technology (IT) to drive future investment decisions through correct analysis and judgement. Based upon this setting, this study investigates the effectiveness of the portfolio selection model by incorporating the mean-variance approach and the investor's judgement vector. Based upon 128 samples of stocks which were randomly selected from the Bursa Malaysia and studied for the period 2000 2008, the results suggest that the model is efficient in improving portfolio diversification benefits by maximising portfolio returns and minimising risk. Theoretical and practical implications are provided in light of the findings.