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The Development of Our National Securities Investment Fund under the View of Personal Finance

Author: MaChao
Tutor: ZuoChuanQi
School: Anhui University
Course: Finance
Keywords: personal financial market securities investment fund bank financing products financial separate services’ cooperation independent financing methods
CLC: F832.51
Type: Master's thesis
Year: 2010
Downloads: 456
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Abstract

The capital market of our country is short of investment culture and stock ownership culture. And the deficiency in system and structure restricts the pace of capital market becoming mature and normative, leading the failure of setting up investors’ methodology on value investment and long-term investment. Insider trading、market manipulation、"herd behavior" and other improper behaviors seriously disturb the development of our nation’s capital market. Base d on the Behavioral Finance Theory, personal investing decisions show irrational to a great extent. When not able to restrain the behaviors of personal investment based on our policy and regulations, we can not prevent these irrational behaviors and realize the advance of capital market normally. Therefore, the financial market unsettled and market fluctuation also is unavoidable.From the economic analysis, under the assumption of perfecta and efficient market, rational economic man pursue self-interest and reach a general equilibrium, which is exactly the goal of market’s automatic adjustment under the efficient market mechanism. The kind of automatic adjustment does not require more supervision. The general equilibrium and self-adjustment seeking to equilibrium reflect a kind of stabilization and stabilization seeking. In this sense, the capital market of our country lacks a thorough market mechanism and rational investors. Since the history of our capital market is short and reform of market economy has still been in its preliminary stage and therefore, perfect market mechanism is just an empty talk. The only we can do is to create a basically stable development environment for finance market through policy\regulations control and coordination which still need improving.So currently, only by fostering rational investors can our country be equipped with necessary elements and impetus for follow-on development. Since restricted by various kinds of reasons, Individual rationality is difficult to control. As a result, our country is encouraging to foster professional institutional investors, making the individuals become clients of institutional investors and make them become the rational investors by the advantages on professional, normal operation, scale effect and sufficient information. From this point, cultivating institutional investors has already become the theme for capital market development.AS the most important professional institutional investors, fund industry has obtained great achievement. In numerous fund varieties, securities investment funds has become the leading institution element in funds market on account of market size and market shares and gradually being the pronoun of all funds by virtue of its social influence. However, institutional investors largely constituted with fund management corporations fail to establish a sufficient competitive force. Differentiation Competition is not obvious and fund industry is faced with unprecedented pressures. The immaturity of China’s financing structure and finance market, informality on funds’ operation and management, the bad performance of fund and its low yield rate, distrust of investors and other related factors result in that the merits and functions funds own are unable to exert.Based on the recent situations mentioned above, we have to analyze the reasons hidden behind them, actively seek to the ones that benefit its growing and gradually improve the market mechanism, operation mechanism and management method. That would be to solve the problem. In multitudinous reasons, the great growth potential in Personal finance market will bring about the securities investment funds with tremendous market demands, capital supply sources and development potential. Since, in personal finance, Investment &Financing is the core. Also, the safety and yield rate of capital and property will decide whether the other financing goals would realize. In family finance or private finance, especially, the securities investment funds is the best investment vehicle that can satisfy personal finance demands in safety, liquidity and profitability, so the market arisen, development and prosperity of personal finance market will produce a huge market potential for securities investment funds market. How to adjust to personal finance business for securities investment funds deserve further analysis. During the process of my study, there still exist some problems just like the coordination problem and agency problem among different finance institutions because of their separate operation, contrast and choice problems from Bank financial products and funds products and discussion on finance operation model and separate services’ cooperation.

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CLC: > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Financial market
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