The Influence Of Financial Knowledge On The Behavior Of Financial Assets And The Profit Of Investment

With the rapid development of our country's economy,the level of household welfare in our country has reached an unprecedented height,and the demand for the management of the residents is becoming more and more intense.However,the development of the financial market is changing with each passing day,and the capital market is complicated and complicated.In order to maintain and increase the value of wealth in the financial market,the level of financial knowledge plays a vital role.The level of financial knowledge is an important human capital.It is the knowledge and ability of investors to effectively use their own financial resources to create more wealth.The level of financial knowledge has an important influence on the financial behavior of the investors.In this context,this paper tries to explore the influence of financial knowledge level on financial asset holding behavior and investment profit.According to?the Investigation and Analysis of Consumers's Financial Literacy?published in June 2017,which was organized by the people's Bank of China's Financial Consumer Rights and Interests Protection Bureau,most investers in China are short of financial knowledge.Most of the existing literature is devoted to exploring the impact of financial knowledge on household asset allocation,which is seldom involved in specific profit.Under this background,this paper attempts to explore the impact of financial knowledge on financial asset holding and the profit of investment.This paper uses the Chinese family tracking survey(CFPS)data of the Peking University in 2014.The financial knowledge indicators are constructed by two methods,namely fractional plus total method and factor analysis method.The influence of financial knowledge on holding behavior and profit of financial assets is studied in detail by using probit,OLS regression.The conclusions of the study are as follows:(1)Our residents'financial knowledge level is quite different.Residents have a better grasp of basic financial knowledge,and generally have a low degree of mastery of more professional financial knowledge.The idea of diversified allocation of financial assets by our residents is not thorough,and the investment income is not satisfactory.It is also found that the level of education and family income can also promote the active participation of households in the financial market and improve the investment income of households.(2)The probit model is used to test the effect of financial knowledge on whether to hold financial assets or not.The results show that financial knowledge can significantly promote households' ownership of financial assets,risky financial assets and riskless financial assets.(3)The effect of financial knowledge on investment profit is tested by OLS.The results show that when the level of financial knowledge is above 6 points,the higher the level of financial knowledge is,the higher the rate of financial investment returns.According to the distribution of financial knowledge,the rate of return on investment are "U" type.The group with the lowest return on investment and the lowest rate of return on investment is the investor who is in the middle financial knowledge level.This study finds that the more financial knowledge is promoted,the more it can help families to hold financial assets.Moreover,when the financial knowledge level of residents reaches a certain level,the more abundant of financial knowledge,the higher the rate of return on financial investment.Therefore,this paper suggests that we should pay more attention to the popularization of financial knowledge and incorporate it into the national education system.Residents themselves should also take the initiative to learn financial knowledge,raise their financial knowledge level and increase the value of family wealth.