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Wealth Management for Individuals through Asset Allocation in Iran

Hajizade, Mohammad Ali | 2012

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 42763 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Bahramgiri, Mohsen
  7. Abstract:
  8. It has been for several years that researchers and pioneers in wealth management have suggested a variety of solutions to investors, in order to allocate their assets. One level of such suggestions is to form a portfolio of stocks. But when it is decided to choose between different asset classes, the solution is more complex. Such questions must be answered: •Is it the best pair to have a portfolio of 70% stock- 30% real estate, or vice versa? •How would it change by possibility of investing in gold market? It is obvious that exact knowledge about investor’s goals, restrictions, and preferences (which are called Investment Policy Statement or IPS) is prerequisite of answering to these questions. This research aims to pose a clear, step by step solution for wealth management for individuals in Iran. This practical approach makes it possible that a bank or financial institute uses a scientific method for their customers’ asset allocation. Recommended steps are as below:1.Choosing asset classes in Iran market; 2.Gathering historical data and calculating risk, return, and correlations; 3.Plotting efficient frontier via mean-variance method; 4.Considering investor’s IPS; 5.Calculating weight of asset classes in portfolio via corner portfolio method. Therefore, 10-year data (1380-1389) was obtained for Iran markets (real estate, gold coin, US dollar, stocks, and government bond). At the end, implementation of these steps is shown for two hypothetical customers.

  9. Keywords:
  10. Asset Allocation ; Optimization ; Asset Classes ; Wealth Management ; Investment Policy Statement (IPS)

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