The goal of this study is to develop a system of measures to increase investment activity and limit the risks of the private investors in the stock market. The object of research is the behavior of private investors in the formation of their individual portfolios. The research method includes analysis of Bloomberg’s historical data series on the return and risk of financial instruments, various methods for quantifying the investor's risk profile. The work features a comparative analysis of various approaches to assessing the individual risk profile of private investors based on analyzing the international experience. The current financial market regulation system is improving slowly and in many ways lags behind the changes in the stock market. The legal prerequisites for the accumulation of long-term savings by the population have not yet been created, the measures proposed by the regulator to limit investments and reduce risk exposure for certain categories of citizens cause serious debate in society. The relevance of the study is explained by a lack of theoretical and empirical studies of the specifics of individual investments in the domestic stock market, the behavior of private investors and the possibilities of risk management in asset allocation. The novelty of the study lies in adapting the best risk profiling practices for Russian private investors, identifying recommendations on asset allocation across all available time horizons, and demonstrating the benefits of diversification not only in the domestic but also in the global market. The main result of the work is the development of methodological approaches necessary to ensure that the generated individual portfolios of private investors match their risk profile. In addition, the main results of the work include the identified advantages of the portfolio approach, in terms of both reducing risks and increasing returns. A risk map of instruments available to a private investor has been compiled. We identified the basic rules and patterns for investing in the Russian market in the long term. The main conclusion of the work is that it is extremely important for the Russian investor to use both factor-based and widely diversified portfolios, as well as global diversification regardless of

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Published on 07/01/23
Submitted on 30/12/22

Licence: CC BY-NC-SA license

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