Research Of The Influence Of Individual Investors's Background And Personality Psychological Factors On Investmental Behaviors

Traditional financial theory based on “Rational and Efficient market” hypothesis does not consider background and personality psychological factors of investors when analyzing investment behaviors.It's getting more and more difficult to explain irrational investment behaviors such as the disposition effect,herding effect,overconfidence which happens in real investment market.Behavioral finance theory combines financial as well as psychological theories,cognitive psychology in particular,and behavioral science.It lows down the hypothesis that traditional financial theory holds,and study individual investor's behaviors and the social psychological reasons that lead to them from a micro perspective.The analysis of Investor's mind and behavior is an important direction of behavioral financial research.The Existing researches focused on two main directions,one direction focuses on mining new investment behavior features using data,in order to discover and validate the irrational investment behavior characteristics,the other is to explore new financial models based on irrational behavior characteristics which have been found,to explain the visions of the financial markets.Existing researches didn't pay enough attention to the deep-seated mechanism and psychological characteristics of investors.Although there are some studies on how personality and cognitive style influence investment decisions,their depth and breadth are far from enough.Through questionnaire and methods of experimental psychology,this study,discussed how demographic and investment characteristics,personality traits,and cognitive styles of individual investors impact their investment behaviors individually and comprehensively.Based on that,researcher established an model of comprehensive factors,and proposed targeted investment advice for individual investors.The main findings and results of this study:First,investors showed a significant irrational cognitive bias on disposition effect,herding effect and overconfidence;Second,investors showed some bounded rationality,they had certain risk control awareness,they were able to disperse funds and control the loss,but the overall execution ability of loss control is not enough;Third,significantly affected disposition effect and herding behavior,while having no significant impacts on overconfidence and the selection of other investment strategies;Fourth,some dimensions of personality traits had positive or negative predictions on investor's overconfidence,herding behavior,as well as their selection of risk control strategies and loss control methods,but no significant effects had been found on disposition effect and other investment strategies.Besides,researcher also established regression model of personality traits on each irrational behavior and investment strategy;Fifth,cognitive style had some prediction effects on disposition effect,herding effect and selection of loss control methods,but its influence on overconfidence and other investment strategies were not significant;Sixth,considering all the above factors,the effects of some variables changed,interactions between some variables became significantly.Researcher established regression models for each of the irrational behavior and investment strategy,considering all the variables.