ENHANCED DECISION SUPPORT SYSTEM FOR PORTFOLIO MANAGEMENT USING FINANCIAL INDICATORS

ABSTRACT

In many cases, financial indicators are used for market analysis and to forecast the future of stock prices. Due to the high complexity of the stock market, determining which indicators should be used and the reliability of their outcomes have always been a challenge. In this article, a hybrid approach in the form of a decision support system is being introduced that offers the best suggestions in buying and selling stocks. This system will help an investor to identify the best portfolio of stocks using a series of financial indicators. These indices act as a model that forecast the future price of a stock by examining its activities and status in the past. Therefore, using a combination of the indices enables us to make decisions with more certainty. Proficiency of this system has been evaluated through the collection of data from the stock market in Iran from 2001 through 2011. The results show that the use of indices and their combination have led to the decision support system to produce suggestions with very high precisions.