Investment strategy to avoid losses on the ukrainian stock market

Myroslava Kushnir
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Myroslava Kushnir: Institute of Regional Research named after M.I.Doloshniy, NAS of Ukraine

Ukrainian Journal Ekonomist, 2015, issue 11, 19-22

Abstract: The Ukrainian stock market is characterized by high volatility. This brings about a low level of investment in Ukrainian equities. To attract investors for Ukrainian stock market it was proposed the investment strategy that helps to avoid losses from investing in risk assets in a recession market and benefit from its growth. The strategy is based on the balancing between risk and risk-free asset. The author has proved the optimal model parameters for Ukrainian stock market using the value function of the Prospect Theory. It was estimated the strategy return with historical simulation. In the article it was realized that the most desirable strategy for investor is the strategy with highest protection level despite the fact that this strategy doesn't bring the highest return. The author has considered the strategy results in a long-run perspective and has come to the conclusion that it is necessary to revise the protection level annually to get all advantages from the market growth.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:uje:journl:y:2015:i:11:p:19-22

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