The theory and practice of investment portfolio formation

Abstract

The main aim of the article - is to provide the methods the investment portfolio formation using theoretical analysis. The article describes the main aspects of fundamental and technical analysis. The advantages and disadvantages of these analysis are reviewed. The authors suggest the opportunity to use these analysis together. The comparison of different portfolio theories is presented. Based on the literature analysis, the uncertainties and limitations of the theories were assessed, also advantages over other theories. In the context of Lithuanian financial institutions, the practice of investment portfolios formation theories were analysed.