Securities Investment Strategy Based On Behavioral Finance

Behavioral finance is emerged in the 1970s, it is in the phenomenon of financial marke.t research and explain the irrational growing up. Compared with traditional finance, behavioral finance more practical Angle to people's investment activities conducted a series of studies. Based on the theoretical basis of behavioral finance are summarized, including the limitation of arbitrage, cognitive and behavioral errors of psychological foundation. On this basis, the article on China securities market research focus empirical research, the noise trading, herding, overconfidence etc irrational phenomenon. The study of noise trading stock this paper selects out as the main indexes change a hand to rate to judge the stock market noise trading phenomenon; The research in this paper to herding behavior on individual investors took respectively and institutional investors, research method of individual investors tend to imitate the practice of institutional investors to institutional investors, the study this paper chose fund heavy warehouse strands of fund shareholder operation to determine the extent of the fund make the same operation; The study of overconfidence this paper selects the securities market returns and volume as main index, through the yields and volume of the study on the correlation of Shanghai stock exchange of stock market overconfidence phenomenon. Through these studies found in our country securities market in noise trading and herding is very serious, overconfidence phenomenon exists, but it is especially serious for institutional investors, individual investors have serious dependent on tendency.In combination with the characteristics of the securities market, this paper irrational phenomenon to investors were put forward in backward investment strategy and momentum trading strategy for its implementation, the empirical research. In the stock market of Shanghai stock exchange in the second quarter of 2008 first-quarter data in 2011, based on the research of the investment strategies were put forward in backward respectively forming period and holding for three to six months and six months or so, momentum of forming period and holding trading strategy should be six months or so and respectively about a year; According to investor's cognitive and behavioral deviation in behavior, this paper puts forward a financial under guidance of investment process management point of view, and the investment process based on behavioral finance every link of management are expatiated; Finally, this paper applied behavior of investors in investment strategies and behavior must pay attention to the investment process management in some matters.