The IHSI model will be presented in the fourth section.
It should be stated here that inflation is incorporated in the IHSI Model, but in an indirect way.
j] will then be used in the IHSI model, to be discussed in the next section, to formulate the optimal portfolio.
The IHSI Model, on the other hand, allows the decision maker to change the portfolio mixture frequently during a specified time span without having to abandon the original long-term investment objective.
The previous section provides an example showing how the IHSI Model works by selecting an investment strategy from among the ten stocks that were chosen for 1988 using the practitioners' method.
The fifth column in each table tells which stocks were selected for investment by using the IHSI Model.
TABLE 4 Comparison of Portfolio Returns Portfolio Formed Practitioners' IHSI For Year Method (%) MODEL (%) 1988 7.
An empirical testing of the IHSI model showed that it is able to produce investment results which not only are capable of preserving the purchasing power of the initial investment, but are also far superior to those achieved by the practitioners' method.
Future research may expand the application of the IHSI model to stocks of other indices such as the SPOC 250 or the S&P 500.