Constitution Of An optimal Investment Portfolio Considering Behavioral Factors Influencing Investment Decisions( Case Study: Students of Iran University of Science an‎d Technology )

3/2/2026 12:00:00 AM

Portfolio optimization is a modern approach in financial markets, originally established through Harry Markowitz’s mean-variance model. selec‎ting an optimal combination of stocks has always been a core concern for investors, as it significantly enhances the likelihood of achieving investment goals an‎d maximizing returns. However, one of the often-overlooked aspects in traditional portfolio models is the consideration of investorsʹ behavioral biases. Behavioral finance, a prominent field in modern financial science, emphasizes that investment decisions are not purely rational; rather, they are shaped by emotions, mental shortcuts, an‎d psychological tendencies. This research aims to design a more realistic portfolio optimization model by identifying an‎d prioritizing influential behavioral biases an‎d integrating them into the investment decision-making process using multi-criteria decision-making (MCDM) methods an‎d expert consultations. The findings reveal that "regret aversion" is the most influential behavioral bias among the study population. Accordingly, this bias was incorporated into the proposed investment model, which was then applied to three major sectors of the Tehran Stock Exchange—basic metals, chemicals, an‎d petroleum products—using monthly data from October 2021 to October 2024 under three investment scenarios. The target population of this study includes 600 students from Iran University of Science an‎d Technology. Based on the collected data, tailored investment portfolios were proposed for different groups based on faculty, field of study, an‎d gender. The results of this study provide practical insights for both individual an‎d institutional investors an‎d contribute to making financial models more behaviorally grounded an‎d aligned with real-world investor psychology. Keywords: Portfolio Optimization, Behavioral Finance, Decision-Making, Regret Aversion, Students of Iran University of Science an‎d Technology.

بهينه‌سازي سبد سرمايه گذاري , مالي رفتاري , تصميم‌گيري , افسوس گريزي , دانشجويان دانشگاه علم و صنعت ايران

Portfolio Optimization , Behavioral Finance , Decision-Making , Regret Aversion , Students of Iran University of Science an‎d Technology

Reyhane Jahangiri Sabzkooh

Dr. Rouzbeh Ghousi