Study On The Effect Of Institutional Investor's Investment Behavior On Stock Market Stability

The stock market is the main channel of direct financing,and the effective way of economic resource allocation,serving for the real economy A country's economic development can not be separated from the stock market,and the vigorous development of the stock market is a solid guarantee to promote the continuous development of a country's economy.Generally speaking,according to the scale of investment,investors can be divided into institutional investors and individual investors.Individual investors donot have mature investment ideas,gambling,expect to earn quick money mentality to chase sell,short-term management in market,which increased the systemic risk.The irrational performance in the early stage of China's stock market is closely related to the market characteristics of individual investors.Compared to individual investors,institutional investors have huge financial and information advantages,mature investment ideas.The experience of western countries shows that the stock market,which is dominated by institutional investors,is more healthy and stable.Therefore,since 2001,China began to vigorously support the development of institutional investors,however,this did not achieve the expected stability of the stock market,insider trading is still existenced.In addition,although the establishment of the primary market is less volatilized than before,the long cattle bear short characteristic is more obvious.In the last two years the abnormal fluctuation that thousands of socks were limit up or limit down shows that the market is not mature.What is the impact of institutional investors' investment behavior on the stability of China's stock market? How to guide institutional investors to contribute to the stability and prosperity of the stock market? This is a question of practical value,and also the key point of this paper.This paper reviews and combs the domestic and foreign institutional investors and the stability of the stock market related literature,it clearly defines the institutional investors and the stock market stability definition and connotation,reviews the development and current situation of China's institutional investors,combined with the actual situation of our country's stock market,based on theoretical and empirical studying institutional investors the investment behavior on the stability of the stock market makes in-depth.In the theoretical analysis,based on the investment portfolio theory,game theory and behavior finance theory to analyze the different behavior of institutional investors influence the stability of the stock market in China;in the empirical analysis,firstly,we makes descriptive analysis on investment behavior of institutional investors in China's securities investment fund in statistics,and market volatility respectively from the macroscopic angle and the micro perspective of empirical research,the securities investment fund and stock price volatility.The empirical result shows that for the stock market,the fund holdings did not really play the role of stabilizing the stock market;for stocks,the fund of stock ownership increases the fluctuation of the stock to a certain extent,and changes in investor sentiment will further enlarge the fluctuation.Finally,the paper puts forward some policy suggestions for the relevant decision-making departments,regulatory authorities and institutional investors to promote the healthy development of institutional investors and the stock market.