Author(s)

Xiaoming Qiu

Corresponding Author

Xiaoming Qiu

ABSTRACT

This article analyzes the impact of investor sentiment on the stability of individual stock prices from the perspective of individual stocks. The research found that: (1) With the help of the fixed-effect model, this paper finds that the higher the investor sentiment, the greater the volatility of individual stocks and the worse the stability of the stock price; (2) With the help of the Chou test, this paper finds that under different external market conditions, The impact of individual sentiment on the stability of individual stock prices is different. Compared with the bull market environment, the increase in investor sentiment levels in a bear market environment has a more significant impact on individual stock volatility, and the stability of individual stock prices is worse. Based on the above conclusions, this article suggests that investors should form a reasonable investment concept, suppress impulsive investment, and reduce abnormal fluctuations in stock prices caused by irrational investment; financial institutions should give full play to the role of information dissemination and objectively evaluate various industries or companies; National authorities should provide reasonable guidance to investors' behavior in terms of regulatory intensity and policy formulation, and strengthen market protection for vulnerable investment groups

KEYWORDS

Investor sentiment, individual stock volatility, stock price stability, external market trends