Trading Behavior Of Stock Market Investment Funds Empirical Analysis

Herd behavior in securities market means that investors imitateothers because they have been influenced into reversing a planneddecision. Feedback trading in securities market means that investors tradesecurities in accordance with showing of the securities formerly. Form the dynamical view, there is feedback circle between herdbehavior and the price of securities, some securities funds use the strategyof feedback trading, so there are closed feedback circles: herd behavior,stock upcreep, feedback trading, herd behavior. The feedback circles in securities market can reduces the efficiencyof the market and destablilizes markets. In Chinese securities market, the number and scale of the investmentfunds are increasing, the influence of invest funds are increasing too. Theempirical evidence of feedback circle is very few in these days, especiallyin Chinese securities markets. This paper firstly takes an overview at theoretical research on herdbehavior and feedback trading in securities markets. Next, this papermakes an empirical research on the herd behavior and feedback trading ofinvestment funds in China. The results show that there is more herdbehavior among funds in China than USA. Go with the increasing of thenumber and scale of the investment funds, the herd behavior among fundsare reducing. On the other hand, the feedback trading behavior amongfunds is increasing. The idea of this article thought, as to the judgment ofthe maturity level,that the level of the feedback circle is much morereasonable than the herd behavior. At the end of this paper, the author gave some suggestions about howto remove herd behavior a feedback behavior in securities markets.