FORMATION OF OPTIMAL INVESTMENT PORTFOLIO: KEY STAGES

Abstract

The article is devoted to the process of forming an optimal investment portfolio of economic entities in the context of modern economic instability and technological changes. The formation of an optimal investment portfolio is an important aspect of strategic financial management. Given the constant changes in the economic environment, business entities must quickly adapt to new market conditions, particularly through effective investment methods. The purpose of this article is to examine the key stages of forming an optimal investment portfolio for an economic entity and to provide recommendations for its effective management to enhance profitability. To achieve this goal, the authors examine the main stages of portfolio formation: analyzing available financial resources, selecting assets for investment, assessing their investment qualities, and optimizing the portfolio. In particular, with regard to the first stage, the authors draw attention to the fact that enterprises should have a clear understanding of their financial capabilities and limitations in order to make informed investment decisions. The following methods were employed: systematization (to identify the key stages of the portfolio formation process), ratio analysis (to assess the investment qualities of securities), and generalization (to draw conclusions based on the research results). The article examines the case of an operating enterprise to analyse the process of forming an investment portfolio in accordance with the identified key stages, assessing its financial indicators such as liquidity, solvency, and asset turnover. The authors propose an approach to forming and diversifying the securities portfolio of the analysed enterprise by including shares of well-known companies based on an assessment of their financial potential and market trends. They also conclude that further optimization of the portfolio is possible through revising its composition, thereby increasing its overall profitability. The practical value of this article lies in its detailed examination of each stage of the investment portfolio formation process, enabling business entities not only to select the right securities for investment but also to assess their potential in response to changes in financial markets. The article also emphasizes that a well-structured portfolio not only helps ensure the stability of a company's financial flows but also contributes to capital growth and increased investment attractiveness.