| With the sustained and rapid development of economy since the Reform and Opening-up,Chinese financial market has been established comprehensively.An important carrier of financial activities,the pre-requirement of stock market,has been gradually liberalized.It also exerts significant impacts on the stock market,such as,diversifying the sources of funds of stock market transactions.The funding which was under restriction in the past is second to none for the market suddenly,however,the high risk of the stock market requires the academic and financial communities paying tremendous attention on how to develop risk control system based on their characteristics.Risks of different funds entering the stock market and the coping mechanism are urgently to be studied.However,the existing related researches in China are limited to focus on the study and digestion of foreign related theories.There are few cases based on the actual situation of enterprises.Take insurance funds as an example,it had been illegal in China to invest stock market by insurance funds until 2004.After the continuing adjustments in the following 13 years,proportion of insurance funds in all kinds of assets in stock market has reached the peak point in comparison with the past thirty percent,which illustrates the regulators’ cautiousness on this affair.Compare to other types of funds,insurance has weaker risk resistance capacity and much stronger correlation effects in enormous loss occasions.As a result,from a practical point of view,it is necessary and significant to establish a risk prevention and controlling system following the guidance of the theories of portfolio investment and behavioral financial for investment of insurance funds in stock market.In order to study the potential risks of adopting more aggressive insurance investment strategy in the background of the stock market liberalization,and provide some related counter measures,this paper takes QH as an example and deeply analyzes the risks of insurance funds investment in stock market from distinct angles such as characteristics of the funds,requirements of return,personality of decision makers,and so on.This paper also aims on risks prevention strategies since these measures will stimulate investment activities safety quickly and stably for insurance funding in the stock market.Based on the real case,this paper discusses the relationship between QH’s operating characteristics and its investment risks,explores the relevance of investment return requirements and investment risk appetite,and discusses the impacts of behavioral finance theory on investment risk.Through the study of QH’s stock investment case,it can be seen that the company’s investment shares are decentralized,undervalued,with high cash flow and so on.On the one hand,these features allow QH to carry out fast-moving short-term arbitrage operations.But on the other hand,they also bring risks from operation problems by themselves,stock market performance,governmental supervision,invested company issues,and so on,leading to dramatic economic losses and other negative impacts.In response to these risks,QH can strengthen the internal risk controlling mechanism and enhance people’s self-awareness of law-abiding.In addition,it is difficult for insurance companies to prevent risks with consciousness,whereas supervision department and industry association should also effectively control insurance funds investment and come up with related supervision measures according to different sources of funds. |
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