Research On Value-growth Investment Strategy And Empirical Study On Effectiveness In China’s A-share Market

Along with high speed development of our country economy,the level of national income has improved significantly, the financing way also is varied, such as stocks, bonds,funds, gold, etc. As one of the modern main financing ways,stock investment has brought the huge impact to people’s life.But the Chinese stock market’s history is short, its mechanism of information disclosure is not perfect,there are a lot of information asymmetry.Especially retail investors have no in-depth study and but they are the hearsay and blind speculation. In a short span of 20 years, China’s stock market has experienced several big rise and fall.This not only ate the wealth of the masses of small and medium-sized investors, even influence the stability of China’s economic and social.Reform of China’s stock market is emerging and transition characteristics,.So to obtain excess yields, it is necessary to find out a set of the investment strategy applicable to the stock market in our country.In this paper, we put forward the value-growth investing strategy on the basis of the value investment theory. Then we use multi-factor mode in 6 valuation factors and 6 growth factors to select more effective and significant factors which affect stock returns valuations. Then we use four effective factors and five effective growth factors to constitute value-growth investment strategy. Then we use the historical data of all the stock in China’s a-share market(except gem) from the second quarter of 2005 to the 3rd quarter of 2015 to prove the effectiveness of the proposed value-growth investment strategy. First of all, we build three investment strategies, including value investment strategy, growth investment strategy and value-growth investment strategy. Then we use value-growth investment strategy in Chinese a-share market and in the specific industry such as machinery manufacturing industry,We finally draw the conclusion: value-growth investment strategy which is double dimension investment strategy is better than single dimension of value investment strategy and growth strategy.And it has very good effect in the prediction of the next issue of stock yield. It illustrates that the value-growth investment strategy has the very good stock market differentiation. In specific industries(this article selects machinery manufacturing industry), it is also feasible. In the above research, Value-Growth investment strategy can provide Chinese stock investors a good train of thought, there is a strong possibility for investors to obtain the stable excess returns.It also suggests that the future trend of the development of Chinese stock market, from speculative market to mature and rational market by gradually.