Title: Portfolio diversification: the role of information technology in future investment decision-making

Authors: Mohamed Zulkifli, Basri Basaruddin Shah, Mohd Daud Norzaidi, Siong Choy Chong

Addresses: Faculty of Business Management, Universiti Teknologi MARA, Johor Branch, Segamat, Johor, Malaysia. ' Faculty of Business Management, Universiti Teknologi MARA, Johor Branch, Segamat, Johor, Malaysia. ' Research Management Institute, Accounting Research Institute, Faculty of Business Management, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia. ' Putra International College, Lot 1838, Mukim Bukit Katil, Ayer Keroh, Melaka, Malaysia

Abstract: Today|s uncertain and volatile market conditions require investors to utilise Information Technology (IT) to drive future investment decisions through correct analysis and judgement. Based upon this setting, this study investigates the effectiveness of the portfolio selection model by incorporating the mean-variance approach and the investor|s judgement vector. Based upon 128 samples of stocks which were randomly selected from the Bursa Malaysia and studied for the period 2000–2008, the results suggest that the model is efficient in improving portfolio diversification benefits by maximising portfolio returns and minimising risk. Theoretical and practical implications are provided in light of the findings.

Keywords: portfolio diversification; mean-variance model; IT development; IT use; investor judgement vector; e-finance; Malaysia; electronic finance; information technology; investment decisions; decision making.

DOI: 10.1504/IJEF.2008.021805

International Journal of Electronic Finance, 2008 Vol.2 No.4, pp.451 - 468

Published online: 04 Dec 2008 *

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