Study On Investment Strategy Of Limit Stock

As an important risk control system, price limits plays its main role to inhibit the excessive volatility and stabilize the stock market. China's price limits policy starts on December 16, 1996, when the Academia begin to concentrated in its impact on the stock market ups and downs in such a system, but not much research are put in the investment strategy of limit stock.Research on the limit stock investment strategy can not only compensate for the lack of academic price limits study, but also provide a reference for investors in practice. This paper aims to study and verify the investment strategy and its effectiveness on the basis of the analysis of domestic and foreign scholars. This paper first describes the research status on limit stock system and the related concepts of the investment strategy; along the development of the theory of investment in securities context, and gradually explain a variety of capital market theory and its investment strategy, then explore the four major investment strategy in schools and analyze its applicability in China, which pave the way for the implementation of the limit stock investment strategy, followed by a correlation analysis on the stock limit dissection and impact factors of the limit stock price performance, the empirical part of this paper is designed to study limit the stock's investment strategy, the simulation test is to limit the applicability of the stock momentum trading strategy, combined with the actual situation of China's A stock market finance theory to explain the study results; conclusion part of this article states some of the research limitations, and the outlook for future research.The theory is based on the theories of capital market theory and analytical schools of the securities investment strategies. By loop simulate the proceeds of the rate and stock index yield to verify the validity of the corresponding investment strategy through the use of historical data on the secondary market transactions under certain investment strategies. The results show that:limit stock's investment strategies are broadly divided into three categories:daily limit stock Momentum investment strategies, information-based investment strategy, technical analysis based investment strategies. Buy in stock before its limit and perform a short-term holdings can be profitable; the profitability gradually weakened with the extension of the holding time, the shorter the holding time the greater the profitability. From the view of behavioral finance, investment psychology, this momentum effect is due to cognitive bias, overconfidence, and other reasons of the investors.