Effective Portfolio Theory Is Applied Research, Personal Finance

Because of the China's rapid economic development in recent years makes the increasing number of middle class,but the market has also caused residents of the house-purchase, retirement, children's education and other issues of concern.Which gave birth to the needs of people on personal finance.Personal Finance is a comprehensive science.Its core content is asset management, so inevitably involves the theory of portfolios.Investment in personal finance planning this important aspect of portfolio theory is to guide based on,portfolio theory not only the theoretical basis of personal finance, but also the implementation of the actual method of operation.Therefore, portfolio theory is very important for personal finance. This paper is to study how to apply portfolio theory to financial planning practice.The main content and structure is as follows:ChapterⅠ, introduction, the paper mainly discusses the significance, background, literature review, research ideas and research methods etc.ChapterⅡ, personal finance planning overview, which tells the basic concepts,meaning,value of personal finance planning, personal finance industry in the development of China's current situation and existing problems.In the final section, focusing on the financial management tools that individual and family often chooseed in the modern market, and analyzed the characteristics of various financial tools ,for example the risk, profitability, liquidity. different risk preferences of investors according to their characteristics choose their own financial management tools.ChapterⅢ, the effective portfolio theory, which is the core of personal financial planning. This chapter first introduces the theory of efficient portfolio involves some basic definitions, then introduce the basic concepts of the portfolio, the portfolio return and risk calculations, and finally obtained according to financial planning portfolio theory should watch out for.ChapterⅣ, case study, because of different investors have different risk preferences, so the portfolio for different course. This chapter draws on multi-objective portfolio model portfolio theory. Pull two parameters in the original portfolio, the parameters represent the risk-return preferences of investors and the degree of optimism on financial markets, this portfolio designed more adapt to the different investors.Author uses actual cases, analyzing the status of a family situation and its existing portfolio, and pull into the portfolio model, by assuming the two parameter values, obtained several different portfolio options, and selected the best investment for this family. In the final section, summarizes portfolio theory applied in the importance of financial management, the existing problems and improvement measures.ChapterⅤ, conclusion, the paper focuses on the application of quantitative analysis of the portfolio, pulling the parameters in the model of the creative work and research of efficient portfolios in the sense of personal finance application. Finally, I pointed out several shortage of my paper, and I will research them in future.