Analysis Of Investment Strategy Of Chinese Stock Market Based On Behavioral Financial Theory

Behavioral finance is a central issue paid a great deal of attention by financial academic circles today. Compared with the rational analytical frame of standard financial theory, behavioral finance pays much attention to a person's real psychology and economic behavior, which offers a realistic guidance for financial decision. There are some drawbacks existing in traditional financial theory, so many economist have queried the validity of traditional rational analysis. People begin to accept some relative theories in behavioral finance, meanwhile, some investors form their own investment strategy gradually.This paper starts with the actual situation of Chinese securities market, discusses all psychologies and behavioral biases of investors systematically on the basis of the theory of behavioral finance and does a game analysis on the expression of Chinese securities market made by herd effect, it also induces the main investment strategy of behavioral finance and does an empirical analysis on the application of regression of regressive investment strategy in Chinese securities market.The logical structure of this paper: Firstly is the introduction with the research meanings, it talks about Chinese securities market from its development to its immaturity, and proves that the investment strategy of Chinese securities markets needs guidance from behavioral finance. Secondly is the development and research of behavioral financial theory. It sets forth the development history, background and main theory of behavioral financial theory as well as the guiding meaning to securities investment systematically. And then it does behavioral biases analysis on Chinese securities investors, analyzing the Chinese securities investors' behavior on the basis of behavioral finance and realizing the behavioral biases. Finally, it does a game analysis on the partial behavioral of Chinese investors. It analyzes the motivation of Chinese investors' partial behavior biases with the help of behavioral financial theory combined with game theory, which forms the investment strategy of Chinese securities market on the basis of behavioral financial theory.This paper starts with the development of behavioral financial theory, sets forth its standpoint and subversion of traditional finance. On the basis of these, it does a behavioral biases analysis of investors in Chinese securities market with the help of behavioral finance, and explains the motivation of partial biases with the help of game theory, after that it puts forward a behavioral investment strategy which suits Chinese securities market, and does an empirical analysis, at last it does a conclusion.Innovation of this paper is the analysis of investors' behavioral biases with the help of behavioral financial theory combined with game theory and the empirical research of behavioral investment strategy on Chinese markets.