Personal Finance Portfolio Decision-making Research Based On Multi-attribute Decision-making Analytic Hierarchy Process (AHP)

China has been a country with high household savings rate, due to the abnormal growth of the sustained and rapid development of the Chinese economy and the real estate industry. It is more and more difficult to people to buy a house. In fact, many commodity prices are up not only included the real estate but also many commodity prices are up. The rapid economic growth has changed people’s sense. They become to care more about personal wealth management.The current personal wealth management is mainly concentrated on the wealth management business of commercial banks and the innovation of financial products. Scholars are mainly focus on the research of context of the major commercial banks financial products, and targeted mainly to higher income social groups, study how to adapt to the needs of different powder line preference investors including commercial banks financial products and how to create more attractive investment products. For every investor, the problems of what percentage of the funds were placed into bank deposits, how much capital into the stock market and how much money to buy bonds in order to obtain the most suitable for their own risk appetite and expected return is paid attention by investors. If investors deposited in a bank, they will have to face the risk of inflation is higher than the rate of interest on deposits; if investors invest all the money to the stock market, they need to face the risk of great first loss; if investors invest funds to bonds market, they need to face the liquidity of the bond market. Different investors have different investment needs, earnings expectations and different risk preferences. This paper looked for the answer of how personalized types of the investors choose the investment ratio of the different financial products.Analytic Hierarchy Process (AHP) is a decision-making based on the evaluation of the index value of each attribute, because of its wide use and decision-making methods, it in all fields have access to a huge application, together with the modern economy environmental requirements, the project construction decision or economic program decision-making. People facing more and more uncertainty, inaccurate statistical value, and will be difficult to apply decision-making methods in and personal wealth management portfolio selection. Analytic Hierarchy Process (AHP) is a good solution to these problems, through the evaluation of the importance of numerical and non-numerical attributes indicators use different decision-making factor calculated attribute weights the results or the optimal choice, depending on the situation.The innovation of this paper is the analytic hierarchy process is applied to the selection of the optimal combination of personal wealth management, innovative yield indicators affect investors’ decision-making from the perspective of individual investors to select the level of risk indicators, income level indicators, the indicators of the level of wealth and higher education indicators together to establish a taking into account investors expected rate of return, risk preferences, income level, level of wealth and tertiary level index system to obtain the most suitable for the investor’s portfolio selection. What is more, the paper compared the other investment decision-making methods, the expected value, standard deviation; Capital Asset Pricing Model; Decision Tree; being too probability distribution method and the Markov decision. The expected value, standard deviation method is the standard numeric decision-making methods, only numeric attribute decisions to make choices. The decision tree method, being too probability distribution and Markov Decision Act must know the probability distribution of the attribute. The capital asset pricing model is selected by past use up the most popular personal wealth management program. But the capital asset pricing model is only used by setting the expected rate of return to obtain the lowest-risk investments, or set a maximum acceptable level to get the highest yield investment portfolio risk. The method has a certain value in theory, but in actual operation, it is often difficult to estimate the expected rate of return, people tend to think that the yield of course the higher the better, the risk is of course the lower the better, and how find flat cross between the benefits and risks.Or to simply summarized by the ratio of the rate of return and risk.Each method has a certain range, the analytic hierarchy process is also the same. This paper found that when all properties have specific values or probability values expressed, the standard deviation of the method or the decision tree method will be more accurate explanation. On the other hand, the more complete personal financial index system is, the more accurate results calculated by the analytic hierarchy process are. To the contrary, when the personal index system joined the wrong attribute items, this method may get the wrong results. Therefore, a complete index system representative will be our constant pursuit of the direction of future research goals.This paper was divided into six chapters, the first chapter is the introduction that describes the full text of the research background, research contents and methods. The second chapter is the literature review of domestic and foreign research status of the different decision-making methods and the China’s personal financial status. The third chapter introduced the decision-making process and methods of use of the analytic hierarchy process. The fourth chapter studied the impact factors of personal wealth management, presented a collection rate of return, risk level, income level, and level of wealth, and the index of the level of higher education personal financial impact factors index system, and lied the groundwork for the analysis of financial management in the Analytic Hierarchy Process. The fifth chapter is the most important part of this paper, through the analysis of two factors, the portfolio selection, portfolio selection and the comparative analysis of three factors, then the provided five indicators to build the index system of finance and investment portfolio decisions compared to other research methods to analyze the advantages and disadvantages of the various methods, and the different ways in different circumstances. The sixth chapter is the summary and Outlook, a summary description of the content of this research, the insufficient in this paper as well as future research directions.