Research On China's Residents' Asset Allocation Under The Influence Of Inflation

Today,with the improvement of China's financial market and the arrival of an aging society,residents have a strong willingness to accumulate wealth for future consumption expenditures.Between the present and the distant future,inflation can be an invisible force to erode the long-term wealth value of residents.Simply relying on bank deposits cannot achieve the goal of fighting inflation.Therefore,it is necessary to carry out reasonable diversification of asset allocation,and weigh the gains and risks in order to obtain the benefits of outperforming inflation in the long run.Based on the above ideas,with the help of mean variance model and the single-index model tool widely used in the financial field,this paper takes a total of 13 years of market monthly data from January 2006 to December 2018 as a sample to analyze how inflation affects asset allocation through empirical research.First,in view of the shortcomings of China's current consumer price index,this paper corrects CPI by introducing stock prices and real estate prices,and uses DFI as a measure of price index.Then based on the mean variance analysis framework,the paper quantitatively demonstrates the optimal asset allocation strategies of residents under different return targets,and explores how inflation affects the outcome of these strategies.Finally,through the sensitivity analysis of two factors — inflation rate and correlation coefficient between inflation rate and asset return,this paper studies whether the proportion of stocks in different sectors is easily affected by inflation.The study found that six industries(energy,materials,industry,medicine,information and telecommunications)have certain anti-inflation capabilities in the stock portfolio,and in the portfolio of stocks and bonds,bonds,materials,industry and medicine showed anti-inflation properties.For portfolios with different expected returns,stocks in materials and the public sector are more sensitive to changes in inflation rates;in a portfolio with an expected return of 10%,the optimal allocation weights for materials,energy,industry,and optional sectors are more sensitive to changes in the correlation coefficient between inflation rate and their asset return.