Investigating investment policy effect on objective achievement in personal account plan

Subject Areas : Journal of Investment Knowledge

Mohamad Ali Kamali ¹ , Ezatollah Abbasian ² , Reza Tehrani ³ , Mojtaba Mirlohi ⁴

1 - Department of finance,faculty of management,university of Tehran, Tehran, Iran
2 - Associate Professor in Economics, Department of economics, Bu Ali Sina University, Hamedan, Iran.
3 - Professor in Finance, Department of finance, Tehran University, Tehran, Iran.
4 - Associate Professor in industrial management, Department of management, Shahrood University of technology, Shahrood, Iran.

Received: 2018-07-11 Accepted : 2018-10-07 Published : 2020-11-21

Keywords: Investment policy, Personal account plan, Asset allocation, Genetic algorithm,

Abstract :

Adoption of suitable investment decisions depends on the long-term investment policy selected. Asset allocation has the most important role on investment return achieved during investment horizen. Considering the effect of investment policy, long-term optimal investment decisions in personal account plan has been investigated in this research. Providing suitable retirement income is the goal of such plan. Two functions including terminal wealth objective function and retirement income objective function are applied to investigate these decisions.According to the complexity of modeling in the aforementioned functions, the Metaheuristic Genetic algorithm has been used. The results are indicative of the importance of objective formulation selection. The retirement income objective function has the nature of more wealth accumulation and more control over economic and market turbulences through higher cooperation in investment and as a result it has been recommended as the optimal function.

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