Journal of Industrial and Systems Engineering

Journal of Industrial and Systems Engineering

Developing and Validating a Model for Stock Portfolio Selection in the Iranian Capital Market

Document Type : Research Paper

Authors
Sadrolla Esmaili 1
Reza Rostaminia 2
Allah Karam Salehi 3
1 Department of management, Masjed-Soleiman Branch, Islamic Azad University, Masjed-Soleiman, Iran
2 Department of accounting, Shoushtar Branch, Islamic Azad University, Shoushtar, Iran
3 Department of financial management, Masjed-Soleiman Branch, Islamic Azad University, Masjed-Soleiman, Iran
Abstract
In the Iranian capital market, stock portfolio selection is a significant challenge for investors due to high volatility and the lack of reliable and effective models. The need for a valid model that considers both risk and return simultaneously is essential to improve investment decision-making and enhance market efficiency. Therefore, this study aims to develop and validate a stock portfolio selection model for the Iranian capital market. The research method is applied in nature and is descriptive in terms of data collection, using a survey-based approach. Initially, relevant studies and research on the subject are reviewed, followed by the development of the model based on field studies. After constructing the research paradigm, the model was formulated using statistical techniques such as Structural-Interpretive Modeling, and model fitting was carried out using the Least Squares method with Smart PLS software. Overall, the research model demonstrated that stock portfolio selection in the Iranian capital market leads to outcomes such as increased returns, risk management, capital preservation, encouragement of investment, market efficiency, and economic growth and development. The results of the analyses showed that the obtained model had acceptable validity (AVE≥0.5), reliability (CR≥0.7), and fit (GOF≥0.36).
Keywords
Stock Portfolio Selection
Capital Market
Structural-Interpretive Modeling
Subjects
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  • Receive Date 17 October 2024
  • Revise Date 15 November 2024
  • Accept Date 09 December 2024