Individual Investors’ Behavior Research in China Securities Market under the Perspective of Behavioral Finance
|School||Tianjin University of Commerce|
|Keywords||behavioral finance individual investor cognitive bias herd behavior Overreaction quantitative investment strategies self-control|
As an new subject arised in the end of last century，Behavioral Finance madegreat progress at the beginning of this century．Especially in2007the global"Irrational Exuberance"foam disappeared，today，as the global economic integrationturns to be more and more deeply，The Subprime Crisis in USA passed to the othercountries by the financial market．Just as the Behavioral Finance experts Shefflinsaid，" The Subprime Crisis is an psychological problem in essencial，because all ofthis is a foam."．As an individual investor in finance market，and also as an individual himself，when they comes to be cognitive bias，the conformity tendency makes them tobecome a huge set．when the set exceeds some quantity，they can make the wholemarket be qualitative change----speed up，reverse，shake.Based on this view，more and more government and financial institution payattention to apply the Behavioral Finance theory．President Obama’s dream brain trusthelps the government induse the rational behavior or nudge as possible as they canwhen they make the policies．In the premise of free choice for people stimulate themto change behavior，facing the direction of benefiting other people as well as oneself.In our country，Behavioral Finance has its own soil for growth．Our securitymarket of financial market formed in the last10years of last century，became morematurity at the beginning10years of this century，spent more than20years walkthrough the journey what developed country spent for more than200years，it is reallya feather in our cap.But in last10years our security market volatility picked up theindex became up-and-down，did not follow the global’s trend．Profit and loss ratiochanged from20%of all profits to only10%of all profits．Investors finds that it is toodifficult to make a profit in such a market．On the one hand，it is because that ourinternal system design may has a defect，on the other hand，the irrational behavioursencourage this phenomenon to explain this irrational behavior and the followinganomalies is the very reason that Behavioral Finance develops. As a result，take the behaviours of the investors in our security market under theBehavioral Finance to analyze，can help the investors recognize the cognitive bias andirrational invest strategy，find out his defect，rebuild his financial operating system.