"portfolio formation" is correct and usable in written English.
You can use it when discussing the formation of a collection of investments. For example, "Proper portfolio formation is necessary to maximize returns on investments."
To find out, we next looked at the five-year periods following portfolio formation.
We don't have this situation in VC, so Markowitz won't apply, which makes portfolio formation much more complex.
We extracted returns from CRSP for the 60-month period beginning in the month of May immediately following portfolio formation and ending April of the fifth year following portfolio formation.
Although the sample tested in regression (e) is very large, it is also very noisy because it lacks portfolio formation.
The portfolio formation and stock return estimation methodology used in this paper closely follows Lakonishok et al. (1994).
It increased steadily for the most expensive stocks, from an average of 17% annually in the tenth year before portfolio formation to 23% in the final year.
The average return value is the annual average return over the 5 year post-portfolio formation period.
The average illiquidity value is the annual average normalized illiquidity over the 5 year post-portfolio formation period.
Annual return is then calculated using these monthly returns for May through April of each of the five post-portfolio formation years.
The average values across the 33 years in the sample of the annual returns are reported in this table for each of the five post-portfolio formation years.
Ten portfolios are formed using normalized illiquidity for the pre-portfolio formation year ending in April for each year in the 33-year period between 1968 through 2000 for all AMEX and NYSE stocks identified on CRSP.
