Financial asset allocation in the portfolio construction decision process of individual investors: Use of the analytic network process

The developments in the financial industry, which has been developing at a rapidly accelerating pace in the world and in our country, especially in the last 10 years, have not only facilitated investments in existing asset classes, but also diversified investment methods in a single asset class and enabled them to spread to a wide range. In this context, the number of investors has also increased at a remarkable pace. Within the scope of the study, an overview was made from the perspective of behavioral economics, as opposed to the concept of "homo economicus" accepted by traditional economic theory. Then, the biases, heuristics and illusions that individual investors face in their investment decision processes are explained. It is recommended to use the analytical network process in order for individual investors who encounter various illusions in the decision and investment processes to choose among the asset classes that are likely to invest and to allocate various financial assets in a balanced and healthy way when constructing a portfolio.