On Personal Investment Psychology And Behavior Based On Behavioral Finance

China’s securities market, an emerging one, is not yet mature in many ways.Excessive speculation is a prominent issue in the present, and the most importantreason is the non-rational behavior of the majority of institutional investors and anumber of small and medium investors. Put the research of behavioral finance into thepractice of China’s securities market for medium and small investors, which canimprove the operational efficiency of the investor’s investment decision-makingability, and it is important significance that to Risk-averse and rational investment tothe investors.Behavioral finance is different from the absolute rational and efficient marketassumptions and the basis of traditional finance, it is base on bounded rationalityassumption, traditional finance, psychology and sociology and other disciplines. It issaid that behavioral finance good at reveal or explain the behavior anddecision-making in financial markets, financial vision of the phenomenon andirrational behavior, through experiment and verification and other methods. Thispaper is trying to verify whether China’s individual investors have the samephenomena in the investment decision-making bias on the basis of behavioral financeresearch.Firstly, this thesis leads up to a brief introduction of the situation in domestic andinternational behavioral finance research, and gradually introduce the concept ofbehavioral finance, punctuated by domestic scholars of behavioral finance,dissemination, research and development. Secondly, this paper introduce theimportant theoretical results in behavioral finance-Prospect Theory, BehavioralPortfolio Theory and Behavioral Asset Pricing Model, and gradually introduce thecore of behavioral finance-Arbitrage, and the introduction of psychological theory and list several common psychological and behavioral deviations in behavioralfinance. Followed by analysis of the experimental questionnaire, in-depthdemonstration of individual investors in the domestic stock market thought processesand decision-making mechanism, the analysis of investor decision-making reasons forthe deviation, the theoretical basis and the process through to investors a variety ofpsychological and behavioral deviation analysis, inspection of domestic investors insecurities generally have psychological and deviant behavior: herd instinct, treatmenteffect, overconfidence theory, blind optimism, under-reaction, over-reaction andmyopic loss aversion. Finally, Through the Angle of theory with practice, this papergives the investors appropriate suggestions and opinions.Various types of investors rational or not in the field of securities investmentrelated to China’s securities market, it is necessary to study and keep the stability,orderly, healthy and sustainable development in the field.