| Behavioral finance theory combined plenty of the frontier theoretical achievements of Psychologies subject and Human Ethologies subject. It corrected and adjusted the "rational people hypothesis" of the modern finance theory and successfully explained much anomalies that the modern finance theory cannot explain as well as summarized various of investors' irrational behaviors. Behavioral finance theory not only provided challenges to the modern finance theory but also amendment to the modern finance theory.This paper aims at digging the investment opportunities and constructing investment strategy based on the behavioral finance theory, which combining the knowledge and the analytical model of the behavioral finance. We found out breakthrough point via the investors' cognitive biases as well as behavioral biases. We discussed the current situation of Chinese securities market and Chinese investors' irrational behaviors and explained the anomalies existing in Chinese securities market based on the behavioral finance theory.We also empirically analyzed the behavioral investment strategy including the average investment strategy and small-cap stock investment strategy. Finally, we provided the feasible framework of constructing investment strategy based on behavioral finance theory. |
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