Research On The Investing Behavior Of Chinese Securities Investors

This paper studies a fundamental situation in the China Security Market, that is, that individual investors have occupied as high as 99% in the China Securities Markets. This proportion does not change much even when national stockholders and artificial persons' stockholders are included. More importantly, among these investors, only 5% are receiving profits. Except for the market itself, it is the improper constitution of the investors and their systematic cognitive biases and behavioral deviations that are the main reasons for this poor outcome.This paper holds that only by putting the investing behaviors into the holistic developing context of the China Security Market, can the essence of the investing behaviors be fundamentally grasped. Starting from the initiating mechanism for the investing behaviors, a systematic analysis was done on the cognitive deviation for the investing behaviors. Utilizing theoretical and practical psychological achievements, and combining the unique advantages the computer has in information processing and execution of instructions, optimization and modification were done on the derivation of investing behaviors, to finally push through the sequencing of security investment to achieve a lasting profit-making situation. Consequently, this paper studies the following five aspects:The market environment has the function of shaping investing behavior. Thus, after briefly reviewing the developing course of the China Security Market, by comparison with the matured market, this paper attempts to reveal the differences and specialties, and the explicit behavioral environment. Based on an analysis of the special construction of the China Capital Stock, this paper discusses the potential influences that reforms of the allocation of stock rights have on the market. By comparison with the investing powers before and after the reform, it explicitly states that the reform will optimize the individual investors' development;the proportion of institutional investors may increase with steady steps;the market's influence may be stronger with a lesser proportion.This paper redefines behavior and investing behavior, builds up the production model for investing behaviors, and analyzes and appraises the relationship between the components of the behaviors. It asserts that the reason the investor will become "the investor" is mainly related to their innate potential, that is to say, as soon as one came into being, a certain tendency will develop. Together with acquired research, investing-related needs begin to appear. Under the dynamic mechanism and self-regulation, and the maturity of the external environment, investing behaviorswill emerge. The investors will gain feedback from the consequences of investing behaviors as well, in order to have positive influences on the subsequent investments. What is strongly emphasized in this paper is the importance of potential, self-regulation and emotion in investing behaviors.Decision-making theory under personal risk was introduced as the reference for assessment of the investing behaviors. Prospect theory divides the selection procedure under personal risk into two parts: editing and evaluation, explaining the important roles that Value Function and Weighting Function play in the evaluation;specifying the carrier of value is the change of wealth or welfare, which is defined according to the bias pitch of the reference point, instead of the final outcome. The study shows that even without respect to the sufficiency of the external information, investors in the security market will have cognitive deviations caused by various psychological factors. These cognitive deviations are vital factors in the decision-making process and result in the deviant investing behavior, thus decide whether the investors' behaviors are irrational or rational, at a certain point.As for how to change such a reality, this paper asserts that there is a need to strengthen the investors' training, and for modification with relevant learning theory and methods for addressing the deviant investing behaviors, such as training in self-confidence, reducing the interference of harmful factors like anxiety, and calculating the scientific investing steering behaviors. There is no doubt that the modification cannot offer any guarantee to help every investor to become a rational one. So, on the basis of an explanation of the program value, routine investment is emphasized. Investment is defined through the holding of the process, and investing behaviors are regulated by program discipline. It is argued that a better way is to utilize the computer: the investors concentrate on an examination of the marketing rules, and refine and check the investing strategies and beliefs, while the automatic computer system executes the decision, thus eliminating the interference of the human being's emotion and any subjective judgment.The empirical study concludes that there is systematic anchor-bias in the China professional consulting institutions. There are also biases in the investing target choosing process. This paper has undertaken simulation research to determine the best investing combination for different security investors with varied investing preferences.