Whether Moods Affect Investors’ Behavior?——Research on Influencing Factors of Investors’ Behavior Based on Risk Perception

Abstract

A large number of previous studies have shown that investors' sentiment has a certain ability to explain the changes of the stock market, but the indicators selected in these studies themselves turn the investors' sentiment into a black box. This approach brings a problem that emotion itself is deeply intertwined with cognition and rationality and the rational part can be explained by the classical financial theory. If the irrational factors in investors' sentiment are insignificant, then these models are only synonymous with the traditional models. In order to solve this problem, this paper uses the Risk-as-feeling model for reference, subdivides investors' sentiment into investors' behavior, investors' mood and other factors, and studies the interaction and interaction between these factors and the external factors that will affect them in theory. In particular, it is divided into irrational emotional factors that are not directly related to cognition, and it will have a subtle impact on emotion and cognition with the potentiality and sustainability. This paper distinguishes the indicators of investors' behavior and investors' sentiment, constructs the indicators to measure the constituent factors of investors' sentiment by using the principal component analysis method, and tests the relationship between various factors affecting each other and jointly determining investors' behavior in psychological theory by using VAR model and market data. The results show that investors' mood is Granger Cause of investors' behavior. There are indeed non-cognitive factors that affect investors' behavior in investors' sentiment, and the paper studies the dynamic characteristics of each factor, which provides a certain basis for further study of investors' behavior and construction of mathematical model.