Author(s)

Jie Gong ¹

Affiliation(s)

¹ Shenzhen Xiaozuanfeng Culture Media Co., Shenzhen, 518000, China

Corresponding Author

Jie Gong

ABSTRACT

This article aims to deeply explore the interaction mechanism between financial market volatility and investor behavior, in order to provide theoretical basis for understanding the market operation law and improving the efficiency of market supervision. Through the comprehensive use of various methods, this article first combs the theoretical basis and current situation analysis of financial market volatility, and makes clear the definition, measurement methods and causes of volatility. Then, it analyzes the theoretical basis of investors' behavior and the specific influence of financial market volatility on investors' behavior, and reveals the complex relationship between them. The results show that financial market volatility significantly affects investors' risk perception and decision-making preference, and investors' collective behavior will further amplify market volatility and form a positive feedback cycle. Based on the above research, the following conclusions are drawn: there is a close interaction between financial market volatility and investor behavior, which jointly affect the dynamic balance of financial markets. In order to promote the healthy development of the financial market, investors, financial institutions and regulatory agencies need to work together to enhance risk awareness, optimize product design, strengthen market supervision, and pay attention to investor education.

KEYWORDS

Financial market volatility; Investor behavior; Interaction; Risk awareness; Market supervision

CITE THIS PAPER

Jie Gong, The Relationship between Financial Market Volatility and Investor Behavior. Financial Engineering and Risk Management (2024) Vol. 7: 111-116. DOI: http://dx.doi.org/10.23977/ferm.2024.070614.

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