The Impact of Retail Investors’ Capital Allocation at the Beginning of the Year on the January Effect in A-Shares

DOI

10.2991/978-94-6239-801-6_40How to use a DOI?

Keywords

Behavioral Finance; Retail Investors; Turnover Rates; The January Effect; Stock Market Volatility

Abstract

Based on the perspective of behavioral finance, this paper focuses on the internal relationship between retail investors’ venture capital allocation behavior at the beginning of the year and A-share “January effect”. Combined with the market characteristics dominated by A-share retail investors, it is pointed out that there are many studies to explain the formation mechanism of “January effect” from the macro market environment or institutional behavior level, pay insufficient attention to the core driving factor of retail micro capital allocation behavior, and do not clarify the transmission path between retail behavior and market anomalies. As a result, the micro-level formation logic of this anomaly remains insufficiently explored, leaving a clear research gap. This paper uses 2018–2024 A-share panel data, takes January turnover rate to measure retail investors’ early-year capital allocation, and conducts empirical analysis via fixed-effects regression and grouping tests. The study found that (1) the intensity of risk capital allocation of retail investors at the beginning of the year (measured by the January turnover rate) was significantly positively correlated with the monthly excess return of individual stocks; (2) The January effect of the high-allocation group is more pronounced among small-cap and growth stocks (replacing the grouping with January yield). This study provides a new perspective for understanding the micro formation logic of A-share “January effect”, and the relevant conclusions can provide reference for retail investors to optimize the allocation of funds at the beginning of the year.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Jingyi Huang
PY  - 2026
DA  - 2026/10/23
TI  - The Impact of Retail Investors’ Capital Allocation at the Beginning of the Year on the January Effect in A-Shares
BT  - Proceedings of the 2026 2nd International Conference on Financial Innovation and Marketing Management (FIMM 2026)
PB  - Atlantis Press
SP  - 360
EP  - 373
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-801-6_40
DO  - 10.2991/978-94-6239-801-6_40
ID  - Huang2026
ER  -