A COMPREHENSIVE ANALYSIS ON THE SIGNIFICANCE OF FINANCIAL LITERACY IN PORTFOLIO OPTIMIZATION

Abstract

This paper examines the pivotal role of financial literacy in the process of portfolio
optimization. In an era marked by complex financial markets and an abundance of investment options, the
ability to effectively manage investment portfolios has become increasingly crucial for individuals and
institutions alike. Portfolio optimization, the strategic allocation of assets to maximize returns while
minimizing risk, stands as a cornerstone of prudent financial management. However, achieving optimal
portfolio outcomes requires more than just financial acumen—it demands a deep understanding of
financial literacy principles.