Formation and optimization of a Private Investor’s Investment Portfolio

Abstract

This paper aims to optimize investment portfolios for individual investors in the ever-changing Russian stock market. There has been substantial expansion in market capitalization, investor base, and financial instruments inside the market. Nevertheless, obstacles such as inadequate financial support and geopolitical conflicts present substantial hazards. We conducted an investigation of the Russian stock market, determined its characteristics, and constructed a regression model to examine index investing. The research proposes to assess the competitiveness of the Russian stock market, rectify deficiencies in the legal framework that impact investor categorization, and suggest regulatory reforms to protect and promote wider market participation. It also aims to create a novel investing strategy that achieves a balance between risk and return, especially during periods of economic downturn. By conducting extensive literature research and regression analysis, this study uncovers significant relationships between the Moscow Exchange index and specific equities. It also investigates the applicability of M. Edleson’s cost-averaging approach and G. Markowitz’s portfolio theory. Despite the Russian market’s development potential, the presence of volatility and regulatory obstacles poses significant risks. The suggested investment design provides a strategic approach for private investors to overcome these difficulties, with the goal of achieving improved long-term profits. The article has devised a novel investment system that allows you to generate money even during a market downturn while mitigating risks.