Research On Investment Duration Of Institutional Investors In The Secondary Stock Market In China

Researchers have obtained conflicting results on the effect of investment duration on price volatility of stock market.Based our improved method for calculating investment duration division,we found that,long-term investors tend to enhance stability of the stock market while short-term investors could significantly increase price volatility.According our classification method,mutual fund is a typical short-term investor in Chinese market.Meanwhile,insurance companies and social security funds are the main long-term investors.Compared to the mature U.S.market,mutual funds are typically long-term investors in the Us,the pension fund is a most important long-term funding in US stock market.At the same time,pension fund is a major investor of mutual funds,which has promoted mutual funds in the US forming longer investment duration and enhancing the stability of the US stock market.Furthermore,we found that the the short assessment time span assert higher pressure upon institutional investors in China and make them tend to use a shorter investment duration to keep short-term profit or loss.What's more,the higher price volatility in Chinese stock market make institutional investors' investment duration even shorter.And the relatively low return yet high volatility make long-term investors allocate only a little amount of their huge total asset into stock market.Based on these conclusions,we put forward targeted policy suggestions and recommendations to promote long-term investment.