Development of portfolio investing under the "shock" economy conditions

Abstract

The article identifies the signs of the onset of a "shock" economy and analyzes their manifestation in late 2021 – early 2022. They reflect trends in macroeconomics, in terms of stock trading and stock activity of issuers. Monitoring of the presented indicators will allow the investor to timely reorient himself in the stock market. The main purpose of the study is to develop an approach to the formation of an investment portfolio. It was implemented for two market situations. Firstly, for a stable economy – using multifactorial models that allow predicting the value of financial instruments. The approach involves a combination of methods such as the J. Tobin model, the optimal investment portfolio model and correlation-regression analysis. When forming the portfolio, stocks and bonds with a yield exceeding the market average and with a low value of the coefficient of variation were selected. The portfolio structure was optimized on the basis of forecasting results using correlation-regression analysis. Secondly, if there are signs of a «shock» economy. It requires the transformation of the stock portfolio, which provides for the preservation of shares of the most stable and protected issuers and the redistribution of other assets in favor of those less sensitive to the stock index, which will provide the portfolio with reduced risk and high potential for growth in value. As a result, it was recommended to replace part of the shares of issuers most affected by the sanctions pressure with bonded loans and gold, as well as transfer foreign currency investments in precious metals.

Keywords

• investment portfolio
• financial instrument
• securities
• stock market
• multifactor model
• shock economy