The Influence Of Holdings Limitation On Institutional Investors· Investment Behavior

Holdings limitation refers to the proportion of institutional investors hold shares of a listed company in all of its holdings. Institutional investors in the shareholding will be subject to various restrictions, but its agency relationship they want to maximize the return on the ultimate goal. In this paper, institutional investors, subject to ownership restrictions, the behavior of the implementation of investment decisions in order to achieve revenue maximization, based on the factors of price and trading volume, momentum and contrarian strategies to achieve revenue maximization.Stake limit that requires institutional investors to adjust their investment behavior, according to the stake in order to achieve maximum revenue. Optimistic about the premise of the holding company in the shareholding ratio is low, institutional investors and the implementation of the momentum acts continuously increasing position until bound by the shareholding system. As institutional investors continue to buy, shares positive feedback trading effect, to attract individual investors to implement momentum behavior chase the stock price to rise further.Limit on institutional investors in the shareholding of institutional investors is difficult to momentum of increasing position, the momentum of the stock price momentum behavior of institutional investors, individual investors momentum behavior of unsustainable, that is, buying less, the stock may be backstressed the focus on technical analysis, investors (whether institutional investors or individual investors) may be secured, causing stock prices fell further.As a professional asset managers, institutional investors is very clear that a reasonable choice is to limit holdings, institutional investors act of reversal, sell the stock, to suppress stock, triggering the chase of the cognitive psychology of individual investors,emotional and investment behavior deviation, and then flesh had to leave. Low for institutional investors to take back to create the conditions, when no longer subject to the constraints of the stake of institutional investors momentum trading, holdings of stock. This cycle, repeated band operation.