Decision Making in Investing:application of Interval-promethee Based on the Composite Weight

This paper introduces the interval-PROMETHEE method based on the composite weight to the decision making process of value investing. We use five performance criteria to measure the growth potential of the firms. They are represented by interval numbers from the real financial data. And the weights of the five criteria are compounded through the information entropy and the subjective method. The intervalPROMETHEE method is applied to rank all the stocks in Shanghai Stocks Exchange. The portfolio with the top 10 stocks was proven to have higher return than the top 20 stocks, and they all have higher return than the Shanghai index which represents the average performance of the Chinese stock market within the 22 month investment period. The empirical research shows the effectiveness of this method in the investment decision making.