Title: Stocks selection in capital markets crisis: multi-criteria approach

Authors: Vinko Belak, Zeljana Aljinovic Barac, Tina Vuko

Addresses: Faculty of Economics and Business, Department of Management, University of Zagreb, Trg J.F. Kennedya 6, Zagreb 10000, Croatia. ' Faculty of Economics, Department of Accounting, University of Split, Matice hrvatske 31, Split 21000, Croatia. ' Faculty of Economics, Department of Accounting, University of Split, Matice hrvatske 31, Split 21000, Croatia

Abstract: The aim of our research was to construct a multi-criteria model for rational investors at bear capital markets. This model should help individual investors in decision-making processes to select optimal stocks portfolios. Applying multi-criteria decision aid methods, three features of stocks were analysed: underlying company|s financial performance measured by BEX index, possible gains or losses measured by investor|s multiplier and industry|s risk rating. Verification of empirical evidence was provided through the sample of Croatian listed companies. All variables used in this research were based on our previous researches on a similar topic and chosen according to the specific characteristics of Croatia, as well as according to the possibility of their implementation in capital markets. Our findings indicate that, in a capital market crisis, optimal portfolio can be selected at emerging capital markets, as well as developed markets, because trends and movements at bear capital markets are analogous regardless of market development.

Keywords: stock selection; financial crises; financial statements; financial analysis; multicriteria decision making; MCDM; capital markets; investors; bear markets; decision making; optimal portfolios; stocks portfolios; financial performance; BEX index; business excellence; gains; losses; multipliers; industry ratings; risk ratings; empirical evidence; Croatia; listed companies; stock exchanges; stock markets; emerging markets; developed markets; trends; market movements; economics; business research.

DOI: 10.1504/IJEBR.2011.037433

International Journal of Economics and Business Research, 2011 Vol.3 No.1, pp.60 - 71

Published online: 18 Apr 2015 *

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