Making investment decisions in the context of uncertainty

Abstract

The formation of securities optimal portfolio is an urgent task of modern financial analysis. Investors face the need for choosing assets that can provide maximum profit with minimal risks. To achieve this, various stock selection strategies are used, based both on investors' subjective preferences and on objective market statistics. The paper provides a detailed re-view of the methods for making investment decisions in conditions of un-certainty associated with fluctuations in stock prices on the Russian stock market. The authors use company profitability statistics to assess investment prospects and offer analytical tools that help minimize risks and in-crease the expected return on a portfolio. Among the approaches considered, the Laplace, Waide, Savage, and Hurwitz criteria, as well as the maximum criterion, stand out. These methods allow for evaluation of attractiveness of stocks based on the market conditions and the risk level. A numerical experiment is conducted using specialized spreadsheet software to compare effectiveness of each method in real market situations. The study resulted in the proposed algorithm for selecting stocks based on mathematical expectations, taking into account the market conditions and the expected risk level. This approach significantly increases the likelihood of achieving high returns on investment portfolios in a highly volatile and uncertain financial market environment.