The Challenges of Contemporary Investment

Monika Zacharová

Littera Scripta, 2024, vol. 17, issue 2, 131-140

Abstract: This article focuses on the optimization of investment portfolios intending to achieve effective risk diversification and maximize returns in the context of the growing need for rational personal financial management. Methodologically, it builds on Modern Portfolio Theory (MPT), combining strategic and tactical asset allocation with quantitative modelling using Microsoft Excel to analyse portfolio performance under various market conditions through the simulation of three scenarios: optimistic, neutral, and pessimistic. The primary result is the empirical confirmation of the hypothesis that integrating alternative assets (cryptocurrencies) into portfolios composed of traditional instruments (ETFs, real estate) leads to a statistically significant improvement in the risk-return profile. The article contributes to reducing information asymmetries and mitigating irrational decision-making among investors. The findings hold interdisciplinary relevance: for practitioners, they offer validated tools for wealth management, while for academia, they provide empirical evidence for critically reassessing traditional models in the context of digital market transformation. The study effectively bridges theoretical depth and practical relevance, emphasizing the enhancement of financial literacy and the prevention of systemic risks associated with uninformed investment decisions.

Keywords: Modern Portfolio Theory; risk diversification; strategic asset allocation; cryptocurrencies; Excel-based financial modelling and simulations; financial literacy (search for similar items in EconPapers)
Date: 2024
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