A Study On The Non-rational Behavior Of Urban Household Assets Allocation From The Perspective Of Behavioral Finance

Urban households tend to make irrational behavior when allocating family assets. At the same time, they lack the guidance of professionals. The financial regulatory system in our country can not protect the legitimate rights and interests of individuals properly, so that the family investors are completely exposed to the risk. In addition, because of early entry into the “aging society”, the resources can not solve all the pension problem, the family needs to prepare their own pension problems as soon as possible. Under this background, studying the irrational behavior of family asset allocation has far-reaching significance. If families can avoid the irrational in asset allocation, families can have long-term stability, and also enterprises can develop healthier and more sustainable. Then government’s fiscal revenue will increase, and ultimately the further stabilize of families and business will be promoted.Based on this background, this paper studies the irrational behavior of urban household asset allocation. First of all, we comb modern portfolio theory, behavioral finance theory, irrational theory as well as domestic and foreign literature review, and analyze the achievements and deficiencies of the existing research, to lay the theoretical foundation for this study. Then, we analyze the current situation of the family asset allocation, find that there are too much preference in savings, stocks and real estate, while ignoring the pension reserve investment in domestic families. This situation is caused by imperfect policy system, the lack of professional social counseling services as well as their less rational thinking. Thirdly, we analyze irrational factors of urban household asset allocation by questionnaire survey. The results show that gender, age, presence or absence of children, education level and occupation will affect the irrational of urban household asset allocation; Risk attitude of family members can also affect irrational of urban household asset allocation. But this is a subjective feeling, which is very unstable and is easily influenced by the environment and others. Finally, we design the optimal combination of urban household asset allocation by Markowitz mean-variance model and Monte Carlo simulation, and explain the applications of the program through a case. A reasonable asset allocation of urban households should be a combination of risk assets and risk-free assets, different risk aversion will form different proportion of risk-free assets and risky assets. For risk assets, urban households should hold bonds more, families having no financial background should not easily get involved in the stock market, and also they can hold small amount of funds and real estate investment as a supplement investment.In the end, the author puts forward relevant suggestions from the government, financial institutions and the families, in order to improve the rational of urban household asset allocation, so as to ensure lasting stability of the families, and to promote the harmonious development of the society.