The Average Chinese Family How to Build an Optimal Investment Portfolio in an Uncertain Market Environment

Abstract

Classical portfolio theory suggests that the maximum expected return for a given level of risk can be achieved through an appropriate allocation between different asset classes. However, in reality, markets are not always fully efficient and there are factors such as market failures and speculative behaviour, which may result in investors not always achieving the expected returns. By analysing factors such as asset classes, risk preferences and investment objectives, this thesis provides strategies and recommendations to help the average household develop a personalised investment recipe, using a combination of portfolio theory and empirical research.