LITERATURE REVIEW ON ASSET ALLOCATION METHODS IN OPTIMISING PORTFOLIOS

Abstract

Investment selection and asset alloction are fundamental components components of financial management that have a significant impact on portofolio performance and risk management. The main objective of this article is to find out the methods used to perform asset allocation strategies to optimize portfolios so as to improve investor’s financial goals and minimize the risks that may be faced so that they can make strategic decisions to deal with market uncertainty. Based on previos research there are many methods that can be used asset allocatiom to optimize portfolios. The purpose of investors investing in the capital market is obtain returns that are expected that are expected to be greater that deposit interest with a certain period of time. Therefore, the choice of calculation method for the optimal portfolio depends on the investor’s preference for risk and experience of the investor. Investor can create an optimal portfolio by balancing risk and maximum return. It all depends on investment objective of each investor.