The Effects Of Individual Investors’ Behavior On Chinese Stock Market Fluctuation

The individual investors take up 99.61% of all share investors. Since most of them don’t have a high degree and their investment styles are not mature, C hinese stock market has remained high volatility all the time. So how the individual behavior influence the stock market? This is a question worth exploring in depth.This article is to do a research on how the individual investors’ behavior influences Chinese stock market. The main two aspects of the research: First of all this article sets up an index system of individual investment heat. The past trading data, such as C ustomer asset, securities value, monthly trading volume, monthly commission and monthly turnover rate of 36090 individual investors from a certain securities company are adopted by this article. Then an index system of individual investment heat is set up through factor analyst. Secondly the article uses the individual investment heat to analyse the effects of investors’ behavior on the stock market.(1) Analyse the effects of individual investors’ behavior on the stock market basing on the Shanghai and Shenzhen 300 index.(2) Do the empirical analyst with individual investment heat and the Shanghai 50 index as well as the Gem index to find out the effects of individual investors’ behavior on the blue-chip share and small cap growth stocks.(3)Basing on one million asset, high net worth investors and low net worth investors are divided into two groups and each group is done empirical analyst with the Shanghai and Shenzhen 300 index to find out the differences of influence between the two groups of investors.According to the results, four conclusions can be fo und :(1) The individual investment heat is effected by investors’ asset and the investors’ trading will, and the investors’ trading will is the most important.(2) The individual investors’ behavior effects on Chinese stock market obviously and the Shanghai and Shenzhen index will rise 2.6% when investment heat increases one unit on any other condition is not changed.(3) The blue-chip share is influenced much more by individual investors and the small cap growth stocks is little influenced.(4) The two eight law can be found in Chinese stock market. The high net worth investors who take up small share in all investors effect the index much more obviously. Some investment advice is given to the individual investors and some investment is given to the supervision department.