A Decision-Making Framework for Investment Diversification Using the Analytic Hierarchy Process
[1]
V. Jayakumar, Faculty of Mechanical and Industrial Engineering, Ibri College of Technology, Ibri, Sultanate of Oman.
[2]
J. Stephen Leon, Faculty of Mechanical and Industrial Engineering, Ibri College of Technology, Ibri, Sultanate of Oman.
[3]
C. Mariappan, Planning Engineer, L & T Kuwait Construction G. C. Co. W. L. L., East Ahmadi, Kuwait.
The present age professionals enjoy a hiked salary unlike the situation a decade before. The increase in the salary of people urges them to save a part of their income for the future. Rather than keeping the savings dormant, the idea of investment would fetch them a good amount of return after a certain period of time. At this present globalization scenario, the investment options are plenty. The national and international banks propose attractive investment plans every now and then. The mutual funds, real estate, gold market etc. prove to a good destination for investment. The share markets, though suffer fluctuations, have always happened to be an attractive place for the risk takers. This paper deals with the application of Analytical Hierarchical Process (AHP) to give a decision making framework for the diversification of investment from the investor's point of view. The popular investment options identified include mutual funds, insurance policies, fixed deposits in banks, share market, gold market and real estate. These alternatives were assessed based on criteria such as returns, market risk, liquidity, term of investment, etc. This paper mainly focuses on applying analytical hierarchical process to select the best option for investment out of various alternatives available.
Analytic Hierarchy Process, Decision Making Approach, Investment Diversification
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