Study On The Personal Financial Investment Strategy Based On The Life-cycle Financial Theory

With our country's rapid economic growth, social progress, and personal income showed a substantial increase in central tendency, Personal wealth for the people's attitude, values and way of treatment than in the past, great changes have taken place. Personal financial management has gradually become the focus. Personal financial management is a system engineering. Individual investors needs to invest in multiple markets, using a variety of investment portfolio of financial instruments. Individual investors face the dazzling investment markets and investment management tools. How can individual investors in accordance with their own background, in their respective risk tolerance, the instrument will be a variety of finance and investment science and rational combined pursuit to higher investment profit, which is the focus of this paper to analyze and solve problems.Comparing with foreign studies, domestic research is on the preliminary stage, especially personal financial strategy based on the life cycle theory, the domestic is still at the stage of qualitative analysis and should not put forward guiding the investment strategy. This article based on the life cycle theory, used the Markowitz mean-variance model as a tool to study the different life-cycle investment strategy.This article summed up in the original theory and recall the personal financial management and life-cycle theory. Using the questionnaire survey method, the author draw the different stages of the life cycle of risk tolerance, in order to model more practical significance. On the Markowitz mean - variance optimization model, add to transaction costs and risk-free asset allocation, and modeling software for computing professionals to draw each stage of life cycle investment strategy. To make the following conclusions: First, Based on the life cycle theory, the individual's risk tolerance with age lowered. Second, Portfolio can spread the risk, and improve the risk assets yield. Third, With age increasing, risk-free asset allocation ratio is getting higher and higher, bonds, funds, and so the configuration of risk assets ratio be reduced accordingly; Last, The bond at the risk of asset allocation accounted for a higher proportion, it should be the main investment instrument of individual investors.