Behavioral finance is a new theory on the research of behavioral investment. With its influence getting greater and greater, behavioral finance has become a hot issue and frontier of current financial study and practice. This paper states systematically the development and main idea of behavioral finance on the basis of extensive study of the research achievements both at home and abroad. It also analyses deeply the application of the theory in terms of its behavioral biases in investment securities in China and sums up several typical investment psychology and behavioral biases in investment. Finally the paper explores the prospect of behavioral finance and its effect on promoting the healthy development of securities in China. |