Proceedings of the IISES Annual Conference, Sevilla, Spain

ORDER AND DISTRIBUTION IN PORTFOLIO MANAGEMENT

GÁBOR CZIRÁKI, TAMÁS KOVÁCS

Abstract:

This research is an experiment to interpret the nature of portfolios and the best practice of portfolio management. It follows the goal of General System Theory, the transfer of models from other disciplines, which can be used to improve missing mechanisms. An interdisciplinary, self-developed model – M&M model – is the focus of research, which prescribes the optimal portfolio distribution in the ratio 1:1:1:4. The model combines the results achieved in the field of organizational development, system theory and chaos theory in one model. This optimization method was compared with the 1:1:1:1 (Modern Portfolio Theory) and 1:1:1:2 (40/20 Portfolio) distributions to search for the optimal distribution of a portfolio. Diversification and focusing are strategic decisions. Using them and managing a portfolio as a system can contribute to deductibles, self-development and sustainability. In a post-crisis period and low global interest rate environment, the demand for simultaneously profitable and crisis-proof investments has increased sharply. To this we would like to carry the self-developed, heuristic M&M model, as optimization aid and based on it the Rolling Nuts Method, as a continuous value-added process. However, it is important to note that our model is not yet final and is under testing. In the future we intend to analyze more data and research the restructuring as decision-making processes, in order to already compare strategic lifecycle planning.

Keywords: Investment Strategies, Organizational Development, Portfolio Management, System Theory, Rolling Nuts Model

DOI: 10.20472/IAC.2018.035.010

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