| the embarrassment that a lot of anomalies which cannot be explained by Standard Finance which preconditions are rational investor hypothesis and efficient market hypothesis displays it's limit. Behavioral Finance that origin in the end of twenty century abandoned rational investor hypothesis and indicated that investors cannot correctly anticipate future conditions because of psychology of sentiment, cognition and preference such as heuristic-driven bias, frame dependence etc. which arouse the attention of investors' psychology study. The paper on the base of history retrospect of the Standard Finance and it's limit surveys the Behavioral Finance theory vabout investors' irrational psychology and inefficient Security Market and compares with Standard Finance. Finally Chinese investors' irrational psychology and Security Market were empirical studyed. Through the regression analysis between investors' psychology and history investment return, we found that during the short-term investors expect continuation of past stock returns, high returns for the longer periods are associated with nervouse bullishness and investors framing depend on the valotility of history investment return when the return is certain. From the study we concludes Chinese investors are irrational. Through the relation examination between investors' forecast and investment returns after forecast, we found that there is no regression relation between investors' forecast and investment returns after forecast. So we refuse the viewpoint that investors' forecast can cause the Security Market inefficient. |
